Tuesday, 5 November 2013

Tuesday, 5 November 2013

Tuesday, 5 November 2013

Mr Deputy Speaker took the Chair at 2 p.m.

Prayers.

Resignations

Hon Lianne Dalziel, Christchurch East

Mr DEPUTY SPEAKER: Members, it is the practice of the House for the Speaker to inform it when a member resigns. The Hon Lianne Dalziel resigned her seat with effect from 11 October 2013. I take the opportunity now to inform the House that on 12 October, in the Speaker’s absence overseas, I gave notice that the seat of Christchurch East is vacant.

Questions for Oral Answer

Questions to Ministers

Economic Programme—Living Wage and Support for New Zealand Families

1. JOHN HAYES (National—Wairarapa) to the Minister of Finance: How is the Government’s economic programme supporting New Zealand families, particularly those on low incomes and with dependent children?

Hon BILL ENGLISH (Minister of Finance): The most important thing the Government is doing is building a competitive economy that creates more jobs and supports higher incomes. Since the tax changes of 2010, households earning less than $60,000, which is around 50 percent of all households, receive more in income and accommodation support, paid parental leave, Working for Families, and welfare support than they pay in income tax—that is, they receive more income from the Government than they pay to the Government in tax. We have also provided extra support for the most vulnerable families. This includes, for instance, $190 million for the next stage of welfare changes to help more New Zealanders out of welfare dependency and into work, and $100 million to extend the home insulation programme, along with many other versions of support for our most vulnerable families.

John Hayes: According to the latest economic data, how are families benefiting from the improving economic outlook and the Government’s economic programme?

Hon BILL ENGLISH: Every family’s situation is different and times remain challenging for many families, but there are encouraging indicators. Cost of living increases remain low at just over 1 percent and interest rates remain low. In fact, today first mortgage interest rates were about half what they were 5 years ago. In the past 2 years average wages have increased faster than inflation, and there are 65,000 more jobs in the economy than 2 years ago. But, most important, businesses are indicating that they are feeling more confident and more likely to hire and to provide wage increases, which will benefit families.

John Hayes: What reports has he received on how a so-called living wage would impact on a two-adult, two-child family?

Hon BILL ENGLISH: The Government supports higher wages and incomes for all New Zealanders, including families. I have received a report from Treasury that shows that families with two adults and two children represent only 6 percent of the families who earn below $18.40 an hour. The vast majority, almost 80 percent of families earning below the so-called living wage, are either single adults or couples with no children. That makes the living wage an extremely poorly targeted intervention to support low-income families.

John Hayes: What other conclusions does Treasury’s analysis reach on the so-called living wage?

Hon BILL ENGLISH: Treasury, I am sure, believes that people being paid more is better for families and better for economies. It is just that everyone else in the country except for the Labour Party knows that if you could legislate for income levels, then why would you not pick a wage of $25 an hour? Why is it being mean in picking $18.40? A Ministry of Social Development study also deals with the slogan that the rich are getting richer and the poor are getting poorer. Ministry of Social Development reports show that income inequality has been declining since the mid-2000s. Household incomes have been rising for all deciles except the top 10 percent of earners.

Insurance—Proposal for State-owned Company

2. Hon DAVID CUNLIFFE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that the insurance industry is “a highly efficient market”?

Rt Hon JOHN KEY (Prime Minister): I will certainly stand still when I read back my statement. Yes, I do stand by it. According to the public register, believe it or not, a total of 96 insurance firms have a full licence from the Reserve Bank’s carry-on insurance business in New Zealand. I have heard of a group proposing to set up a 97th insurer. The only point of difference is that that insurance business would put hundreds of millions of dollars of taxpayers’ money at risk by entering a market in which that group has no expertise and for which it cannot offer any competitive advantage. That cavalier attitude to taxpayers’ money comes from who else but the Labour Party.

Hon David Cunliffe: Given that answer, would the Prime Minister rather put hundreds of millions of dollars at risk making the insurance market more competitive, or would he rather do a Soviet-style renationalisation of a large telecommunications company that he says is about to go broke?

Rt Hon JOHN KEY: The member can rest assured that we are not about to take over some large telecommunications company. The second thing that has been quite useful, actually, in that question is that the member himself has admitted it would put hundreds of millions of dollars of taxpayers’ money at risk. He clearly read the editorials today. [Interruption]

Mr DEPUTY SPEAKER: Order! I am having difficulty hearing members.

Hon David Cunliffe: Given that roughly 60 percent of the insurance market is owned by just two players, what percentage of the telecommunications market does the Prime Minister think is necessary to justify his Soviet-style renationalisation of Chorus?

Rt Hon JOHN KEY: Well, what the member is clearly demonstrating is that he is so out of touch with the issues that actually matter to New Zealanders that despite having hours and hours of warning, he put the wrong question down today. He did not ask me one about Chorus, so I am not going to give him an answer.

Grant Robertson: I raise a point of order, Mr Speaker. The Prime Minister got a little bit of whatever it is in his system out of his system, but he has not—

Mr DEPUTY SPEAKER: Order! [Interruption] Order! I am on my feet. When a member raises a point of order, they should succinctly and tersely come to the comment and not refer to the member. I will hear the member.

Grant Robertson: I raise a point of order, Mr Speaker.

Mr DEPUTY SPEAKER: I am interested in the point of order you were raising.

Grant Robertson: Indeed, thank you, Mr Deputy Speaker. The point of order I was raising is that the Prime Minister failed to address the question as he is required to do under Standing Order 383.

Mr DEPUTY SPEAKER: No, I believe the Prime Minister did address the question. I will give the member a supplementary question.

Grant Robertson: I raise a point of order, Mr Speaker. With respect—[Interruption] Is this a point—

Mr DEPUTY SPEAKER: Order! This is a point of order. [Interruption] Order! Points of order will be heard in silence.

Grant Robertson: Although the question contained a phrase that might be regarded as perhaps outside the strict reading of the Standing Orders, it was very similar to phrases that were in earlier questions from the National Party. The Prime Minister is required to at least address the question, and I invite you to tell me how he did that.

Mr DEPUTY SPEAKER: Well, I will quite happily tell the member how he did that. The supplementary question was in two parts. It referred in the first instance to insurers, with two of them having 60 percent of the market, and then referred to telecommunications companies. The Prime Minister responded to the part on telecommunications companies.

Hon David Cunliffe: Given that the Prime Minister’s party received over a million dollars in donations in 2005 from the insurance industry, how much in donations would it take for him to undertake a Soviet-style renationalisation of a large telecommunications company?

Rt Hon JOHN KEY: I have no responsibility for donations to the National Party. [Interruption]

Mr DEPUTY SPEAKER: No, I agree.

Hon David Cunliffe: I seek leave to table this rather charming DVD called The Hollow Men, which features the Prime Minister and backgrounds his receipt of a million dollars in donations from—

Mr DEPUTY SPEAKER: I understand—[Interruption] Order! I understand that the DVD is in the public arena.

Hon David Cunliffe: I am not sure it is very freely available. Perhaps members opposite could raise their hands if they have already received a copy. We would be happy—

Mr DEPUTY SPEAKER: Order! The DVD is in the public arena. Does the member have another supplementary question?

Hon David Cunliffe: Point of order, Mr Speaker.

Mr DEPUTY SPEAKER: Point of order—[Interruption] Order! There is just too much clatter going on during points of order. There will be silence while there are points of order.

Hon David Cunliffe: I seek leave to table the hard copy of The Hollow Men, which in more detail points out the million dollars of donations that the Prime Minister’s party received from the insurance industry.

Mr DEPUTY SPEAKER: That book is also in the public arena.

Hon David Cunliffe: Is it not true that the Prime Minister called Kiwibank a “failing institution” after almost a million Kiwis signed up as customers; therefore, why could not KiwiAssure also provide a locally owned, competitive, and high-quality option in the insurance market?

Rt Hon JOHN KEY: It is great that it has taken to supplementary question No. 4, but we will get to the heart of it. These are the reasons. For a start off, let us just take Kiwibank. Yes, it is a good little business. I might point out, though, that it has taken $860 million of taxpayers’ money and it has never paid a dividend in over 10 years. Secondly, the insurance market is hardly a free ride, because insurance companies happen to be in the process of paying $20 billion out in Christchurch. So if we had KiwiAssure, which the member wants to talk about, then New Zealand taxpayers would be paying a fortune into Christchurch. Thirdly, it is a competitive market at the moment. So if one assumes that they are just going to lay off their risk, they will be laying it off with the same reinsurers. Fourthly—

Hon David Cunliffe: I raise a point of order, Mr Speaker.

Rt Hon JOHN KEY: I have not finished. Sit down.

Mr DEPUTY SPEAKER: No—[Interruption] The Prime Minister must yield to a point of order. I will rule whether the point of order is in order.

Hon David Cunliffe: The Standing Orders provide that Ministers’ answers should be brief, to the point, and germane to the question.

Mr DEPUTY SPEAKER: Order! [Interruption] Order! I am on my feet. I think the Prime Minister was doing his best to answer what was quite an expansive supplementary question.

Rt Hon JOHN KEY: To my fourth point as to why an insurance company would be a bad idea—name another major bank that operates in New Zealand that has an insurance company. It would not make sense to lend money—[Interruption]; no, lend money—and actually have the insurance on the same property they are renting. They do not do that.

Hon David Cunliffe: Given the fourth of his long answers there, is he aware that ASB Bank owns Tower Insurance; if he is, why is he asking such a stupid question?

Rt Hon JOHN KEY: Yes, and it does not provide insurance in the form that we are talking about.

Rt Hon Winston Peters: When the Prime Minister heard of KiwiAssure over the weekend, did he liken it to that brilliant policy announced by New Zealand First on 20 October called KiwiSure, and did it put him in mind of the famous English adage “Imitation is the most sincere form of flattery.”?

Rt Hon JOHN KEY: With the greatest of respect to the member, it did not get any better an idea when Labour announced it.

Hon David Cunliffe: Given that the Prime Minister has now beaten up on Kiwibank, KiwiSaver, KiwiRail, and now KiwiAssure when these policies have all been very popular with New Zealanders, why is his Government so out of touch and why does he persist in being such a “KiwiSpoiler”?

Rt Hon JOHN KEY: Well, we can go through them if you like, but, as we pointed out with Kiwibank, it has got $860 million of taxpayers’ money and has not paid a dividend. KiwiRail—well, that is very interesting, but if we want to go through the details of that, the Labour Government, as part of an election policy, decided to waste hundreds of millions of dollars of taxpayers’ money paying Toll a huge amount of money. This is the same Labour Party that went into the election campaign in 2008 promising to underwrite deposits, which cost this Government $1 billion. There is one part—I am prepared to accept this bit. I am prepared to accept this bit. There is one gap in the market for insurance that KiwiAssure could provide. OK, I will accept that, and that is income continuity, because if you are about to lose your job because there is no place welcome for you in the Labour Party like Trevor Mallard and Phil Goff, you would need—

Mr DEPUTY SPEAKER: Order! The member will—[Interruption] Order! Question No. 3, Katrina Shanks. [Interruption] Order! There is just too much noise. I am having difficulty hearing any of the participants.

Roading, Wellington—Transmission Gully

3. KATRINA SHANKS (National) to the Minister of Transport: How will the construction of Transmission Gully benefit the Wellington region?

Hon GERRY BROWNLEE (Minister of Transport): This is a vitally important piece of infrastructure, and the benefits of constructing the whole of the roads of national significance are large. Transmission Gully will help shave 40 minutes off the commute from Levin to Wellington. It will improve road safety, reducing the number of serious and fatal crashes; it will mean an alternative route exists in the event of a natural disaster; and it will contribute to jobs in the region. The National Government, with the support of the Māori Party, United Future, and ACT, is investing in the infrastructure of New Zealand, supporting cities like Wellington, when Labour and the Greens are abandoning them.

Katrina Shanks: What progress has been made towards the construction of Transmission Gully as part of the northern corridor road of national significance?

Hon GERRY BROWNLEE: Last week the Prime Minister confirmed that this Government is committed to building the Transmission Gully road and that construction would begin in the middle of next year. This is a roading project that the National Government has progressed as part of the roads of national significance package, and we believe that the benefits of not only Transmission Gully but the northern corridor as a whole to the Wellington region will be substantial.

Katrina Shanks: Why is the Government proposing to build Transmission Gully using an availability model public-private partnership?

Hon GERRY BROWNLEE: Because it is a very efficient way of doing it. There has been a lot of misinformation surrounding the procurement of Transmission Gully via a public-private partnership, mostly from the Greens, but not from Labour because it has not decided yet whether or not to support it. The availability model means just that: the payment to the operator does not commence until the road is built and is made available. The operator is paid on availability and performance of the road. If the road is not available, it is not paid. At the end of the contract—25 years on—the asset becomes an asset of the State.

Hon Peter Dunne: Will the Minister be good enough to acknowledge that the construction of Transmission Gully as a public-private partnership was the first point in the National - United Future confidence and supply agreement, and also that the decision to proceed with this from next year will end some 75 years of uncertainty for Wellington people over northern access and egress?

Hon GERRY BROWNLEE: Yes, I do want to confirm those points raised by the Hon Peter Dunne. It would be fair to say that since he first came to Parliament in 1984 Mr Dunne has been a strong advocate for the road of national significance, and it was indeed a very important point in the coalition arrangement that was reached at the time of the last election. What that also shows is that a National-led Government is capable of giving very big wins to parties that choose to be in Government with it.

Insurance—Proposal for State-owned Company

4. Hon DAVID PARKER (Deputy Leader—Labour) to the Minister of Finance: Does he agree with IAG’s submission to the Commerce Commission that “there is real potential for major banks to begin underwriting their own general insurance products, and to compete directly with the incumbent insurance companies at the underwriting level as they already do at a retail level of the insurance market”?

Hon BILL ENGLISH (Minister of Finance): I have no responsibility for the opinion of IAG New Zealand but I can give the member the benefit of the experience of watching and working closely with the Reserve Bank to reduce the risks of our banking system to the New Zealand taxpayer. There have been 3 or 4 years where capital requirements have been increased, the core funding ratio has been increased, and we have put in place an open bank resolution system. The idea of a bank taking on more insurance risk is about the dumbest proposal that could possibly be made in the light on the events following the global financial crisis. The member should think very carefully before putting forward a policy that heads in exactly the opposite direction to where every other country in the world is heading.

Hon David Parker: Am I correct, then, to infer that he does not support the creation of a Kiwibank-style insurer to serve New Zealand consumers, which would reduce the dominance of overseas-owned insurers, keep profits in New Zealand, and bring added competition, added flexibility, and choice to New Zealanders?

Hon BILL ENGLISH: That is exactly the misleading pitch around this proposition. If there is one thing every taxpayer in the developed world now understands but the Labour Party does not, it is that the risk would be on taxpayers—taxpayers in Ireland, Spain, the US, and the UK. A billion-dollar impost on New Zealand taxpayers arises exactly from financial institutions taking too much risk and loading it on to the Government. That is why his proposition is stupid.

Hon David Parker: Why is spending hundreds of millions of dollars of taxpayers’ money on a failed asset sale programme and $30 million on a taxpayer subsidy for the benefit of Rio Tinto a better use of taxpayer-funded resources than creating a publicly owned insurance company that acts in the interests of New Zealanders?

Hon BILL ENGLISH: Well, I will tell the member why: in the case of the electricity companies, everyone has now come to understand that electricity demand in New Zealand is dropping and, secondly, there is a significant risk around weather carried by those companies. We have now shifted half of that risk off the taxpayer to investors in the public market because we want to avoid the taxpayer having to take the kinds of risks that have destroyed public finances in other developed countries. That is why the Government taking on even more insurance risk than it currently holds is crazy. We have already got to pay the bill for $7 billion worth of Earthquake Commission risk. Why would we take on more, other insurance risk?

Hon David Parker: Does he agree with Steven Joyce that a State-backed insurance company acting in a competitive market would be “a radical shift into a state-controlled economy reminiscent of the 1970s,”; if so, why would John Key take a “radical shift into a state-controlled economy” by proposing the Crown consider an equity stake in Chorus rather than just enforce the ultra-fast broadband contract?

Hon BILL ENGLISH: I agree with Mr Joyce. I recall the Opposition being very critical of the National Government having to pay out $1 billion under the South Canterbury Finance guarantee. We also have to pay out billions to back the Earthquake Commission. We already have taken a lot of insurance risk that has gone wrong, and that is why I support Mr Joyce’s view, because there are international markets and insurance companies that are better able to manage insurance risk. In the last 5 years we have had plenty of examples of why the Government and the taxpayer are not in a good position to manage that risk or pay the bills when it goes wrong. It is a dumb idea.

Hon David Parker: Why would John Key take “a radical shift into a state-controlled economy” by proposing that the Crown consider an equity stake in Chorus rather than enforce the ultra-fast broadband contract?

Hon BILL ENGLISH: First of all, the Prime Minister has not proposed that. Secondly, what is surprising here is that when we have had the biggest manifestation of risk, it going wrong, and its impact on taxpayers in 100 years, the Labour Party still does not get it.

Hon David Parker: Why should anyone accept what the Minister of Finance says about KiwiAssure when 10 years ago he was pouring scorn on Kiwibank, saying it was “a small bank that has got no long-term viability.”?

Hon BILL ENGLISH: It is a small bank and it has never paid a dividend. It is great that it meets the needs of New Zealanders but it is certainly not an argument for creating a parallel insurance company. It is absolutely clear from our experience with the Earthquake Commission, AMI Insurance, and South Canterbury Finance that when the taxpayer has to underwrite this kind of risk, it can go wrong and taxpayers can be up for billions of dollars. Having low-income people working in the rain, paying their PAYE, and underwriting financial risk is as dumb an idea as you can have in the 2020s.

Rt Hon Winston Peters: Why would any sane New Zealander believe that last diatribe given that just 10 years ago, when the Cullen fund was announced, he said the very same thing about that, then went down just last week to its 10-year celebration and humbly had to admit what a fool he was?

Hon BILL ENGLISH: Well, as the member will know, because he was there, I did not say that. I did praise Dr Cullen for finding a way of stopping the Labour caucus spending billions of dollars in surpluses. If Dr Cullen had been there, he would have said that that was why he set up the Superannuation Fund—to protect New Zealand from the Labour caucus.

Skycity, Convention Centre—Advice on Gambling-related Harm

5. METIRIA TUREI (Co-Leader—Green) to the Minister for Economic Development: Did his office withhold information about the harm caused by the SkyCity convention centre deal because it was considered sensitive by SkyCity; if so, why?

Hon STEVEN JOYCE (Minister for Economic Development): No. As the member knows, a huge amount of material relating to the Government’s negotiations with Skycity has been released. On 8 July I released the Cabinet papers, the regulatory impact statement, and material relating to social harm from Government agencies. On 17 July I released a larger amount of material relating to the negotiations, all the briefings to various Ministers for Economic Development, and emails between officials. As is appropriate when releasing information provided in confidence to the Government, Skycity was consulted about some of the material proposed for release. My office made it clear that the Government’s preference was to release as much information as possible, and only material genuinely commercially sensitive would be withheld.

Metiria Turei: Why did his office agree, after consulting with Skycity in July, to redact documents and withhold advice about gambling harm arising from the convention centre deal?

Hon STEVEN JOYCE: The member is simply incorrect. That was not the case. In fact, if you look through the correspondence that Mr Fisher from the New Zealand Herald has released, it says that my office is saying at various times to officials: “Looking for more material to release.”, “Why so much withheld?”, “Re-cut to release more, not less.”, “Provide more information.”, and so on. That was all prior to the big release on 17 July.

Metiria Turei: I seek leave to table a page from the Official Information Act request dated 12 July, which says that the second tranche of information—

Mr DEPUTY SPEAKER: Order! The member has to state only what the material is and the source, and she has done that. Leave is sought for that purpose. Is there anyone opposed to that course of action?

Document, by leave, laid on the Table of the House.

Metiria Turei: I raise a point of order, Mr Speaker. I have not had an opportunity to describe it. I can do so now if that would be helpful.

Mr DEPUTY SPEAKER: Leave has been granted.

Grant Robertson: I raise a point of order, Mr Speaker. It would be useful for members of the House to have a little bit more information about the document, because I am unclear as to what it is.

Mr DEPUTY SPEAKER: I am sorry. I thought that the member had made the comment and was then about to embellish it, and I wanted to have her desist from that. If I was a little bit trigger-happy, I apologise, but leave has been granted.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. The member made it abundantly clear what the document was.

Mr DEPUTY SPEAKER: That is what I thought.

Hon Gerry Brownlee: It is not appropriate for members to then read the contents of the document.

Mr DEPUTY SPEAKER: That is exactly the point I have made. Members know the rules. [Interruption] No. I have dealt with it. If the member has another supplementary question, she should now progress with it.

Metiria Turei: I raise a point of order, Mr Speaker. Can you clarify as to whether leave has been sought—

Mr DEPUTY SPEAKER: Leave has been granted.

Metiria Turei: What reasons did Skycity give to the Minister or to his officials for wanting information withheld about gambling harm from the casino operation, and was one of those reasons commercial sensitivity?

Hon STEVEN JOYCE: Just for the member’s benefit, to clarify what I thought I had already said in a previous answer, nothing directly related to harm or harm minimisation was withheld at Skycity’s request. The Skycity-related material that was withheld relates solely to information that was provided in confidence and would have the potential to unreasonably prejudice Skycity’s commercial position. It was not in relation to harm or harm minimisation.

Metiria Turei: I seek leave to table a second document from the same package of information, dated 7 July, describing how substantially more material on harm minimisation would have been released but for the commercial sensitivity provisions.

Mr DEPUTY SPEAKER: And what was the origin of that, sorry?

Metiria Turei: The origin of this document is the Official Information Act.

Mr DEPUTY SPEAKER: An Official Information Act request. Leave is sought for that purpose. Is there anyone opposed to that course of action? It appears not. Leave is granted.

Document, by leave, laid on the Table of the House.

Metiria Turei: Was he deliberately misleading the House when he said on 10 July 2013 that “my understanding is we have released most of the information that we have … I think particularly the key elements in relation to potential harm have been released and are also very adequately traversed in the regulatory impact statement.” when, in fact, the papers now show that but for commercial sensitivity from Skycity there would be substantially more material released?

Hon STEVEN JOYCE: No, the member is wrong. Can I point out to her that the two items that she has tabled relate to correspondence that I understand are from the period around 8 July. There was a subsequent further release of information on 17 July—a larger amount of information. Again, I will restate that I have sought to release every single piece of information I possibly can and have withheld only anything in relation to commercial sensitivity.

Metiria Turei: Is it not the case that Skycity and the Minister have conspired to keep harm minimisation information secret because neither wants the public to know how much Skycity relies on problem gamblers to fuel its profits?

Hon STEVEN JOYCE: No. The member can ask the question six times if she likes, but the answer remains the same. She is simply wrong and she is, once again, seeing conspiracies where there are none.

Metiria Turei: Given that we—

Maggie Barry: Tell us about your housing policy.

Metiria Turei: OK. What an opportunity. [Interruption] I raise a point of order, Mr Speaker.

Mr DEPUTY SPEAKER: Well, the member should not be distracted.

Metiria Turei: It is very difficult to focus when there is this kind of chatter from behind, so perhaps—

Mr DEPUTY SPEAKER: Order! I am on my feet. [Interruption] Order! I am on my feet. If the member responds to an interjection, she has to take the consequences. I gave her the floor, and she now has it for her supplementary question.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The problem is that the questioner is trying to put the question but there is a barrage of an uncultivated, uncultured voice from behind her. It is a very raucous voice. It may be suitable for TV, but not for Parliament.

Mr DEPUTY SPEAKER: I have to say that I agree with the member, and I have put up with it from both sides from the very first point of question time today. I, for one, would certainly appreciate more decorum from all members around the asking of questions.

Metiria Turei: Given that we now know that he and Skycity wanted harm minimisation information kept secret because of the extent—

Hon STEVEN JOYCE: I raise a point of order, Mr Speaker. The member is starting with a supposition that is in direct contradiction of every answer that I have given today. Surely she could just ask the question.

Metiria Turei: The question I am asking is directly related to the information that I have tabled and the evidence that I have presented to the House, which has been accepted for tabling in this House, regardless of Mr Joyce’s answers.

Mr DEPUTY SPEAKER: Yes. Look, I think we are getting into some difficulty, and I am just trying to put my hand on the Speaker’s ruling that says that a supplementary question should not start with the word “given”. The Clerk will give it to me, but it is, I think, about page 164—

Grant Robertson: Point of order, Mr Speaker.

Mr DEPUTY SPEAKER: No, I am on my feet. That has been a longstanding principle of questions in this House. If it has been relaxed of late, the consequence is pretty evident today. No member can actually say “given”. It is Standing Order 170(5), and I ask members to have a look at it. [Interruption] Standing Order 170(5). It has long been the tradition of this House that supplementary questions should not start with the word “given”. A supplementary question is, in itself, that. It is a question; it is not a statement of fact.

Hon Trevor Mallard: 170(5) of the Standing Orders has nothing to do with that at all.

Mr DEPUTY SPEAKER: Sorry, 170(8)—170(8).

Hon Trevor Mallard: I raise a point of order, Mr Speaker. There is no 170(8) in the Standing Orders.

Mr DEPUTY SPEAKER: Speaker’s ruling 170/8. I am sorry—Speaker’s ruling 170/8.

Metiria Turei: Will the Minister now release all the information he and his office have relating to the harm caused by the Skycity convention centre deal, given that we now know that he and Skycity wanted harm minimisation information kept secret, in part because of the extent to which problem gambling contributes to Skycity profits; if he will not release that information, why not?

Hon STEVEN JOYCE: Well, given that I already have released the information, how many more times would the member like me to release the same information? If I was her, I would read the information that is there. It has all been released. The only thing that has been withheld is in relation to anything that would unreasonably prejudice Skycity’s commercial position.

Hon David Parker: I seek leave to table a report of the Prime Minister’s comments this morning, which reports that consideration was being given to the Government to all options, including taking an equity stake in Chorus.

Mr DEPUTY SPEAKER: Sorry, the source of that?

Hon David Parker: Yes, it is from interest.co.nz.

Mr DEPUTY SPEAKER: So it is a public website. No, it is a public document.

Canterbury, Recovery—University of Canterbury Rebuild and Other Initiatives

6. NICKY WAGNER (National—Christchurch Central) to the Minister for Tertiary Education, Skills and Employment: What progress has been made in the rebuild of the University of Canterbury?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Last week I was very pleased to announce that the Government will provide up to $260 million to the University of Canterbury to support its rebuild programme following the Canterbury earthquakes. As a result of the quakes, student numbers were down 15 percent in 2012, compared with the previous 3-year average. It has been a tough time for everyone at the university. It has developed an excellent campus-wide redevelopment programme to refresh and modernise its campus and supporting infrastructure for the benefit of its students. The new campus will truly be world leading. There will be a new integrated regional science centre, fully modern science teaching and research facilities, as well as an expanded and fully modernised College of Engineering and other facilities. The Government is delighted to make this contribution to assist in the Canterbury recovery.

Nicky Wagner: What will be the total investment by the university in the rebuild of the campus?

Hon STEVEN JOYCE: It is a very significant programme. The university’s total programme of investment is costed at $1.1 billion over a period of 10 years. The university estimates that it will actually spend in the local economy in total, in both capital and operating expenditure, about $4 billion over the next 10 years, as well as bring an additional 3,000 domestic and international student places into the region. The rebuild of the university is another very significant injection into the already fast-growing Canterbury economy, and a significant part of the wider earthquake recovery in the region, because it is, of course, a very important part of the region—that is, its leading university.

Nicky Wagner: What other steps is the Government taking to assist tertiary education in Canterbury?

Hon STEVEN JOYCE: Of course, the tertiary education sector was hit hard by the earthquakes. Since the earthquakes, student achievement component funding for Canterbury tertiary institutions has been maintained at 2011 levels, despite the downturn in students. Institutions have also been exempted from funding recoveries where enrolments did not reach expected levels. The Tertiary Education Commission has recently approved a continuation of this exemption for 2014. Recently, of course, I announced that the Government would inject just under $19 million into the Christchurch Polytechnic Institute of Technology to enable it to further expand its trade training capacity. The expansion means that the institute will be able to once again grow its numbers of students in trade training by a further 1,000 student places each year through until 2018.

Ministers—Confidence in Advice Received

7. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he have confidence in the advice his Ministers receive from Government departments?

Rt Hon JOHN KEY (Prime Minister): As Prime Minister I do not see or receive all the advice provided to Ministers by Government departments. I do, however, have confidence that Ministers are generally well served by their departments, but that does not mean, of course, that the Government always agrees with departments’ advice.

Rt Hon Winston Peters: How can he have any confidence in, for example, Treasury, when it has urged the Deputy Prime Minister to tell the Minister of Education to scale back policy and to sneak through education changes in order to minimise public opposition?

Rt Hon JOHN KEY: Treasury, like all Government departments, provides a lot of advice to Ministers. Ministers sometimes accept it and sometimes they reject it.

Rt Hon Winston Peters: Ah, so you accept it, then. Thank you very much. Was the advice received by the Deputy Prime Minister, the Hon Bill English, urging him to rein in Minister Parata and advising how to spin education changes to the public requested by the Deputy Prime Minister or his staff; if so, how long has Treasury been advising his Government on spin and how to deceive the public of the country?

Rt Hon JOHN KEY: I have not seen that advice. You would need to put the question down to the Minister of Finance, but I would be very surprised if Treasury used the word “spin”.

Rt Hon Winston Peters: I seek leave to table a press statement, to relieve the Prime Minister of his surprise, which says precisely that.

Mr DEPUTY SPEAKER: What is the source of the press statement?

Rt Hon Winston Peters: The press.

Mr DEPUTY SPEAKER: It is a public statement. It is in the public arena.

Rt Hon JOHN KEY: I seek leave to table the register of ownership of Tower Insurance. The Leader of the Opposition might find that ASB does not own any shares in it.

Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is there anyone opposed to that course of action? There appears not. Leave is granted.

Document, by leave, laid on the Table of the House.

Rt Hon Winston Peters: Hang on. [Interruption]

Mr DEPUTY SPEAKER: Order! I am trying to hear.

Rt Hon Winston Peters: Well, first of all—

Mr DEPUTY SPEAKER: Has the member got a supplementary question?

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. First of all, how about dealing with my request to table a document?

Mr DEPUTY SPEAKER: It is in the public arena.

Rt Hon Winston Peters: Then you can show the Prime Minister deference; after you have dealt with the business of the House first.

Mr DEPUTY SPEAKER: Order! I have already ruled on that.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. In relation to that point of order, last week the Speaker—I think it was in relation to Mr Cunliffe—ruled that where a member’s word was called into question, evidence could be tabled, even though it was in the public arena, if it refuted directly and backed the member’s word. The Speaker did allow that.

Mr DEPUTY SPEAKER: It is a matter of dealing with each case as it actually comes along. You are calling for an instantaneous response, and I think that, on balance, I got it right on this occasion. I will stick by that.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker.

Mr DEPUTY SPEAKER: Well, I have dealt with that point of order.

Hon Clayton Cosgrove: I am not challenging your ruling, but you may or may not be aware—and it was me who put this to the Speaker last week—that discussions had occurred with him, Mrs King, and me about this very point. He agreed to consider the procedure and agreed to put it into place, as he did with Mr Cunliffe. The ruling, as I understand it, was that if a claim was made and that was refuted, and a member had, say, a press statement that backed up the quote, or a press clipping that backed it up, or a documentation that was in the public arena, then in that case the Speaker, I think, in the last session, allowed it.

Mr DEPUTY SPEAKER: It was a press statement that was available to members; it was not an opportunity to make a statement. The tabling of a document is to inform the House, not to make statements. So if the purpose is to actually release a press statement that is in the form of a statement, it is moving beyond the bounds of what is acceptable.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. To clarify what you have just said—all I did was get up and say that I wished, in an effort to remove the Prime Minister’s doubt about the existence of this document, to present a press statement, after he raised the question as to whether it existed.

Mr DEPUTY SPEAKER: The issue, though, is that the press statement is already released and available, and the member is using that in the purpose of making a statement. I thought we were clear about that.

Hon Gerry Brownlee: Has the Prime Minister received any advice from officials on who the top 20 shareholders are in Tower Insurance?

Grant Robertson: I raise a point of order, Mr Speaker. The Standing Orders are very clear that the Prime Minister has to have some level of ministerial responsibility for a question like that.

Mr DEPUTY SPEAKER: I will uphold the point of order. The Prime Minister does not have ministerial responsibility for that.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I am asking a supplementary question in respect of the question that asked whether he has confidence in the advice his Ministers receive from Government departments. I asked what advice he has had from officials about a particular matter.

Mr DEPUTY SPEAKER: In relation to the ownership or the shareholding of a company that the Government does not own, and I have ruled that the Prime Minister has no responsibility for that.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I would ask you to think very carefully—[Interruption]

Mr DEPUTY SPEAKER: Order! A point of order is being heard. Silence!

Hon Gerry Brownlee: I would ask you to think very carefully about whether you should rule out of order a question that seeks to understand whether the Prime Minister has received advice about a shareholding in a company, or, for that matter, advice, because you would find, I think, that there will be other circumstances. There was even an issue brought up earlier today by the Opposition that would mean the Prime Minister is immune from answering questions about some of these matters.

Mr DEPUTY SPEAKER: The Government has no responsibility for Tower Insurance shareholders, and I have ruled on that aspect.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. The question that is on the sheet, the primary question, talks about confidence in advice from officials. Officials give advice on a range of things. I am simply asking whether he has had advice about who are the top 20 shareholders in Tower Insurance, and I am doing that because the Leader of the Opposition has made a completely unsubstantiated comment—

Grant Robertson: I raise a point of order, Mr Speaker. He has moved well outside the boundaries of a point of order.

Mr DEPUTY SPEAKER: Order! We already have a point of order. I will hear the member.

Grant Robertson: I raise a point of order, Mr Speaker.

Mr DEPUTY SPEAKER: I have heard enough from the member. [Interruption] Order! I really do not need any assistance. I have ruled on this matter. This came from a primary question that was in the broadest possible sense, and we are moving on. I have ruled that the Prime Minister has no responsibility for the shareholders of Tower Insurance, and that is the way I interpreted the question.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I did not ask him any question that related to responsibility for Tower Insurance. I asked him about advice that he had had from officials. If that is ruled out of order, the Prime Minister becomes immune from all sorts of questions from the Opposition. I do not think that is good for Parliament.

Grant Robertson: I raise a point of order, Mr Speaker. There are two points in relation to this. The first of these is that you have made a ruling, and it has now been challenged by the Leader of the House three times. Members on this side of the House have been thrown out of the debating chamber for exactly that point. There is no justification for the Leader of the House to continue in this way.

Rt Hon JOHN KEY: The question I am answering here, from the Rt Hon Winston Peters, is in relation to advice. [Interruption]

Mr DEPUTY SPEAKER: Order! Silence!

Rt Hon JOHN KEY: The question I have got here, on the sheet, from Mr Peters is in relation to Government advice. The member has asked me a question about advice I received from officials. That has to be in line. Secondly, in just the question before that, Metiria Turei asked Steven Joyce a question about advice in relation to Skycity. He was expected to answer that, and the Government has no ownership of Skycity.

Mr DEPUTY SPEAKER: Order! I am standing on the ruling that I have made, in that we have moved completely beyond where the primary question was.

Hon Gerry Brownlee: Has the Prime Minister received any advice during question time today that would lead him to believe that the allegations made by the Leader of the Opposition were incorrect?

Grant Robertson: I raise a point of order, Mr Speaker. That question is out of order for the same reason that you ruled the previous question out of order. The member is now trifling with you, and you should eject him from the Chamber if he continues.

Mr DEPUTY SPEAKER: I will determine whether or not it is in or out of order.

Rt Hon JOHN KEY: During question time we heard Mr Cunliffe say, basically, what sort of bozo would not know that ASB owned Tower Insurance. For the record, I have received some advice about the top 20 shareholders. For instance, No. 1 is Tea Custodians, No. 2 is Accident Compensation Corporation—

Grant Robertson: I raise a point of order, Mr Speaker. The Prime Minister is traversing material that you have just ruled out of order in this House. I cannot understand why it was out of order before, and now it is in order. I would ask for your ruling to be consistent on this matter.

Mr DEPUTY SPEAKER: We are going to move on—

Hon David Parker: Has he received any advice that ASB in fact owns Sovereign Assurance?

Rt Hon JOHN KEY: Ah yes. Thank goodness! The Opposition spokesman on finance knows something even if the leader is completely misguided. Yes, it does own Sovereign, and—hold on—let us get to the better bit. Let us replay the video of when I answered the question, which was: “It’s not very smart to be a bank like Kiwibank, lend money, and then issue fire and general insurance against that.”, at which point the Leader of the Opposition got to his feet. Sovereign provides life insurance, and the way he is going he will need life insurance, I reckon.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. [Interruption]

Mr DEPUTY SPEAKER: Order! Is this a point of order?

Rt Hon Winston Peters: It is a point of order. A serious development has crept into this Parliament, and it is that a number of people in this Parliament, without anything so much as an appreciation of what is going on, just wantonly clap when their leader sits down. Now, thankfully—[Interruption] No, no, no, no.

Mr DEPUTY SPEAKER: I am on my feet. [Interruption] Order! That is not a helpful point of order.

Rt Hon John Key: I raise a point of order, Mr Speaker. Can I suggest to the member if he did not kick people out when there was no cause to do so, they might still clap for him.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker.

Rt Hon Winston Peters: Point of order—

Hon Gerry Brownlee: No, I have got one here.

Mr DEPUTY SPEAKER: I have acknowledged the member Gerry Brownlee for a point of order.

Hon Gerry Brownlee: I am concerned about the ruling that you gave earlier. I am simply, as members often do, asking—

Mr DEPUTY SPEAKER: For consideration?

Hon Gerry Brownlee: Particularly in light of the question that was allowed from the Hon David Parker.

Mr DEPUTY SPEAKER: I will give the matter some consideration and bring a finding back to the House.

Rt Hon Winston Peters: Mr Speaker, I want to know why you—

Mr DEPUTY SPEAKER: Is this a point of order?

Rt Hon Winston Peters: Yes, it is. It is a point of order. Why did you give the Prime Minister licence to make that claim as a point of order when he knows full well that, unlike him, we do not prop up crooks?

Mr DEPUTY SPEAKER: Order! That is not a point of order.

Brendan Horan: I raise a point of order, Mr Speaker. [Interruption]

Mr DEPUTY SPEAKER: Order! Look, excuse me for a moment. Points of order will be heard in silence. The House is in a very fractious mood, but we will abide by the tradition of the House that points of order will be heard in silence. If members continue to interject during points of order, some of them will be taking an early shower.

Brendan Horan: I would like clarification from that member—whether he was referring to me.

Mr DEPUTY SPEAKER: No, that is not a point of order.

Brendan Horan: Well, I take offence at that member’s last comment.

Mr DEPUTY SPEAKER: A point of clarification is not a point of order.

Young Offenders—Youth Crime Action Plan

8. MIKE SABIN (National—Northland) to the Associate Minister of Justice: What has been the outcome of his review of the 2002 Youth Offending Strategy?

Hon CHESTER BORROWS (Associate Minister of Justice): Youth justice in New Zealand has seen significant changes since the 2002 strategy was set, including the very successful 2010 Fresh Start reforms. This has seen real reductions in youth crime, with appearances before the Youth Court coming down 19 percent—well on our way to delivering our ambitious Better Public Services target of a 25 percent reduction by 2017. Last week I released a replacement document for the 2002 strategy to take what we have learnt over the last decade and set the direction for youth justice over the next decade. The Youth Crime Action Plan reflects what those on the front line have told us: that we are world leading in youth justice, but we need further gains and need to lift our performance at every point across the system. The plan is a package of changes across the youth justice system that will do just that.

Mike Sabin: How will the Youth Crime Action Plan deliver on the ambitious targets?

Hon CHESTER BORROWS: The plan identifies three key areas where we will focus our efforts over the next 10 years: working in closer partnership with community organisations, preventing unnecessary escalation of young people into the system, and creating more opportunities to get young offenders safely out of the system and to keep them out. It includes 30 specific actions over the next 2 years covering these areas and Government support for the sector. It keeps us accountable to the communities we serve, including regular opportunities to review progress and set new actions that respond to emerging challenges and opportunities.

Mike Sabin: What are some of the actions that the Youth Crime Action Plan sets for the next 2 years?

Hon CHESTER BORROWS: It sets specific actions including working with communities to create local plans that address specific challenges in their communities, making family group conferences as user-friendly as possible so that families get the best possible resolution for them, improving planning and support for youth returning to the community after an out-of-home court order, ensuring that every possible youth offender is referred to police youth aid, and increasing the use of supported and electronically monitored bail to reduce the number of young people held on remand in youth justice residences.

Sexual Offences—Pre-trial and Trial Processes

9. JAN LOGIE (Green) to the Minister of Justice: Will she reconsider an alternative trial process for sexual abuse cases following Police statements that girls targeted by the Roast Busters group have not been “brave enough” to bring a complaint; if not, why not?

Hon JUDITH COLLINS (Minister of Justice): No. Alternative trial processes will not alter the fact that victims still need to come forward to make complaints and, ultimately, give evidence against an accused person. There are very serious concerns about how inquisitorial trial processes would work in this country. A lot of work has been done, and is continuing to be done, across the justice sector to find ways to make it less traumatic for abuse victims to lodge complaints and, ultimately, give evidence in court. I have here a copy of a police booklet, Information for Victims of Sexual Assault, which is available on the police website, and prepared with assistance from Louise Nicholas. It explains the support available for victims and makes clear statements about how they can be helped. As Louise Nicholas has said, for these crimes to be dealt with, the girls do need to come forward and talk to police. I would counsel that member not to make comments that, ultimately, could result in trials being aborted.

Jan Logie: Does she accept evidence that over 90 percent of sexual abuse victims do not make formal complaints, often because they know they will be re-traumatised by the process?

Hon JUDITH COLLINS: I am not sure that that can actually be labelled as evidence, if the complaints have not been made. However, I do accept that there are many people who are victims of sexual abuse, who do not choose to take a complaint forward to police—and that is for a variety of reasons—and they are both male and female. But I also know that in this House we do not do victims any favour by interfering in police investigations and by possibly tainting trials.

Jan Logie: Is justice denied to sexual violence survivors if the current pre-trial and trial system precludes them from making a complaint?

Hon JUDITH COLLINS: I do not agree with that member’s assertion, because she is presuming that the system currently precludes people from making complaints. Quite clearly, it does not.

Jan Logie: Against all the evidence. When it is clear from evidence that survivors fear the entire trial process and when they need to be brave enough to even make a complaint, will the Minister be brave enough to look again at some of the real solutions that experts have given her?

Hon JUDITH COLLINS: I actually find that question just so insulting and, frankly, it absolutely belittles this House. That member should think about it before she asks questions like that.

Jan Logie: I raise a point of order, Mr Speaker. That was a straight question and I would like an answer.

Mr DEPUTY SPEAKER: And the member got a straight answer.

Andrew Little: Will the Minister implement the recommendation of the Law Commission, made in March this year, to modify the law on evidence in sexual offence cases so that victims are not revictimised when giving evidence on offences against them?

Hon JUDITH COLLINS: No, and the reason for that is that—as that member must well know because I made media comment at the time—we would then have an entirely different system of law for sex trials, an inquisitorial system, than we would for kidnapping trials, which often go along with the sex trials. This would actually revictimise victims by making them have to give evidence twice—not once.

Andrew Little: In the face of the serious allegations of predatory gang-based sexual violation that have surfaced in the last 2 days, why has her only response been to bring forward a bill that she first discussed nearly 6 months ago, which merely discourages putting up images of such offending on social media?

Hon JUDITH COLLINS: Well, that member is again wrong. That bill, the Harmful Digital Communications Bill, was due to be tabled today. The first I knew about these disgusting events was yesterday after Cabinet. For him to imply that that is my response is absolutely disgraceful, and frankly—

Andrew Little: That’s exactly what I’m implying.

Hon JUDITH COLLINS: Is that what it is? Well, then, he should stand up and apologise, because the man clearly lacks the courage to say what he means.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You would have heard the expression: “the man lacks the courage to say what he means.” That is unparliamentary—that is unparliamentary. We all know it, and I want to know what you are going to do about it.

Mr DEPUTY SPEAKER: In the manner in which it was phrased, it is a reasonably frequent occurrence in this House. There are several layers beyond that, which have been ruled out of order.

Jan Logie: Will the Minister consider some of the other recommended solutions separate to an inquisitorial system, such as specialist sexual violence courts, independent sexual violence advisers, or one-stop shops for sexual abuse survivors; if not, why not?

Hon JUDITH COLLINS: There are quite a lot of these services already available, but I am always willing to look at what victims ask for. For instance, we now have specialist Victim Support. We have no real limitation period on making a complaint. We have the victim’s identity automatically suppressed in any criminal proceedings. Victims do not have to face the accused; they can give evidence from behind a screen. They are allowed a support person with them in court while giving evidence, and we have a dedicated sexual violence victims’ adviser to support victims. There is also counselling and financial support available. Actually, for a member of Parliament to come to the House and say that there is nothing available for victims simply discourages victims from coming forward to the police. There is a lot available now and I would like them to come forward.

Child Poverty—Measurement

10. JACINDA ARDERN (Labour) to the Minister for Social Development: Does she stand by her statement on Q+A in relation to child poverty that “So why do an official measure that then by very definition still has, quite frankly, you know, it’s, sort of, wherever you put the measure, you’re always going to have people in poverty …”?

Hon PAULA BENNETT (Minister for Social Development): Yes, but I think I put a bit of a different emphasis on it. Look, we have a number of measures. We report on them both domestically and internationally, but making one measure official will not make a difference.

Jacinda Ardern: Why will she not adopt the strong recommendation by the Children’s Commissioner’s expert advisory group to measure and set targets to reduce child poverty?

Hon PAULA BENNETT: We do measure poverty. In fact, as I say, there are a number of measures. We use them domestically. We actually report internationally on them. What we do not agree with is that you need to have one official measure, and that is because we think what the children need most is action. They need action on the ground, and you can see that in what we are putting in. We are putting more than $15 million into the Children’s Action Plan, and $188 million has gone into welfare reforms. We are seeing more than 7,000 sole parents going into work more recently, and that makes the biggest difference for those children.

Jacinda Ardern: What are the five measures of poverty that the Children’s Commissioner’s expert advisory group has recommended that the Government adopt?

Hon PAULA BENNETT: I do not have them in front of me right now.

Jacinda Ardern: Is she embarrassed that her Government’s refusal to measure child poverty officially means that the Children’s Commissioner has had to get money from a charitable trust to do the job himself?

Hon PAULA BENNETT: There are plenty of measures out there. The Children’s Commissioner is independent. If he wishes to do that, then he is perfectly entitled to. I want to commend things like the $377 million going into State housing for more bedrooms and to make sure that we have got extra room for those kids, and the clean-up that has had to be done on those State houses because they were neglected for so long, which led to unhealthy children. For under-6-year-olds, we are seeing care for them 24/7 now, and we are addressing rheumatic fever. There is an emphasis on early childhood education for those children who were the most disadvantaged and were not getting it. That is just the start. When we talk about the economy and the difference it is making in jobs, we see an emphasis on business so that businesses can employ more people, and so that those children are living in a household with more income. The support for hardship assistance is at more than $266 million. The list is long. That is what children need.

Jacinda Ardern: If the Government measures child poverty, as she claims, can she tell the House how much she has reduced it by; if not, why not?

Hon PAULA BENNETT: I stand by my original comment. You are more interested in the measures on the other side of the House—

Jacinda Ardern: I raise a point of order, Mr Speaker. I am interested in holding the Government to account on its progress. I asked a straight question: if she measures child poverty, then how much has she reduced it by?

Mr DEPUTY SPEAKER: And the member has answered her.

Jacinda Ardern: I raise a point of order, Mr Speaker. If I could ask that question again, because I think you would find it is not in the transcript.

Mr DEPUTY SPEAKER: Well, then, ask the question again.

Jacinda Ardern: If the Government measures child poverty, as she claims, can she tell the House how much she has reduced it by; if not, why not?

Hon PAULA BENNETT: The member can get on her high horse as much as she likes, but the reality is—

Grant Robertson: I raise a point of order, Mr Speaker.

Mr DEPUTY SPEAKER: A point of order—[Interruption] Let the member finish.

Grant Robertson: The point I want to raise is that the Minister, having been asked a straight question, began her answer in a way that attacked the member. That has previously been ruled by Speakers to be unacceptable.

Mr DEPUTY SPEAKER: I accept that point of order. The member should not have been so derogatory. Just let us answer the question.

Hon PAULA BENNETT: Getting on your high horse is now derogatory, so that is all right then, particularly on Melbourne Cup day. [Interruption]

Mr DEPUTY SPEAKER: Order!

Hon PAULA BENNETT: Oh, this is ridiculous! To the member, right? I think that what we are doing here is fundamentally making a difference. I do not have the numbers in front of me, as the member says. She asked for those measures. I think that what the kids need most is action. That side of the House is more interested in counting it. We are interested in making a difference on the ground, and that is what those children need.

Question No. 7 to Minister

BRENDAN HORAN (Independent): I raise a point of order, Mr Speaker. With the greatest of respect, the Speaker said, when elected—

Mr DEPUTY SPEAKER: What is the point of order?

BRENDAN HORAN: —“a Speaker … upholds the democratic traditions of Parliament and respects the right of every one of you elected to this House”. Earlier, the Rt Hon Winston Peters’ words were out of order and I take offence. I ask you to uphold the great office of Speaker and require that member to stand, withdraw, and apologise.

Mr DEPUTY SPEAKER: Well, I have no recollection of precisely what the member is referring to, and I have no recollection of any words being directed at the member. The third thing is that the member should raise a point of order at the time. The member chose to raise a point of order and ask for clarification. Clarification is not a point of order.

Housing, Affordable—Social Housing

11. ALFRED NGARO (National) to the Minister of Housing: What progress has the Government made in growing the community housing sector?

Hon Dr NICK SMITH (Minister of Housing): We are on target to treble the size of the community housing providers through this term of Parliament to over 1,000 homes, with both grants and legislative reform. Over the past month the Government has entered into partnership agreements with Accessible Properties, Habitat for Humanity, Comcare Trust, VisionWest Community Trust, the New Zealand Housing Foundation, and the Chinese New Settlers Services Trust for the construction of 158 homes in Christchurch, Wellington, Hamilton, Tauranga, and Auckland, with the average contribution of taxpayers being about $180,000 per home. The other changes that we are making with the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill, which we hope to have passed by Christmas, will further help the growth of the sector.

Alfred Ngaro: What are the advantages of having a more diverse social housing sector involving community organisations, and what has the Government learnt from international experience?

Hon Dr NICK SMITH: The first is that social housing tenants often have complex needs. They need more than just a roof over their heads; they need specialist community providers that are able to provide those wraparound services that make a real difference for families. The second is that community organisations do a better job of stretching the taxpayer dollar and getting more homes for the taxpayer dollar. The third is that if we look at community housing organisations, which are huge in places like the United Kingdom and Australia, they have a far better record of consistently managing the quality of their housing, far more than State housing organisations, not just in New Zealand but internationally. Our long-term goal is in fact to grow the community housing sector to up to 20 percent of New Zealand’s social housing.

Alfred Ngaro: How do the Government’s social housing reforms fit with the Government’s broader programme to improve access to affordable housing?

Hon Dr NICK SMITH: The changes that we are making in social housing are just a part of the programme. We have announced changes in past legislation to free up land supply. We have expanded support for first-home buyers with our changes to KiwiSaver and Welcome Home Loans. We have legislation that will be coming into Parliament around development contributions. Tomorrow I will be announcing, along with my colleague the Minister of Commerce, the results of our market study into building materials costs, because all of these measures are required if we are going to give Kiwi families access to more affordable housing.

Broadband, Ultra-fast—Infrastructure Pricing and Contract with Chorus

12. CLARE CURRAN (Labour—Dunedin South) to the Minister for Communications and Information Technology: Will the Government abide by the final Unbundled Bitstream Access Service Price Review determination issued by the Commerce Commission today?

Hon AMY ADAMS (Minister for Communications and Information Technology): Following the announcement this morning of the Commerce Commission’s final Unbundled Bitstream Access (UBA) price, the Government is currently working through the implications of that decision and has not made any decisions.

Clare Curran: Given the Commerce Commission’s final price determination announced today followed “to the letter of the law” a process set down in 2011 in the Government’s own legislation, will the Government enforce its contract with Chorus and tell it to get on with the job of rolling out ultra-fast broadband according to the price and conditions negotiated under that contract?

Hon AMY ADAMS: We expect all parties to perform their contractual obligations with the Government and, to date, all of the local fibre company partners have been doing that very well.

Clare Curran: Does the Government’s ultra-fast broadband contract with Chorus contain an expectation by Chorus that the copper price would be held at a certain level above the price announced today by the Commerce Commission?

Hon AMY ADAMS: I have no knowledge of any such provision.

Clare Curran: If Chorus cannot deliver on the negotiated contract and continues to press for Government intervention in the price of copper or for the Government to give it more money to roll out fibre, will the Government declare that Chorus has defaulted on the contract and re-tender it?

Hon AMY ADAMS: As I said in the answer to the primary question, the Government has not made any decisions. What I will say is that the concern for the Government is not about Chorus. The concern for the Government is about ensuring that the end-users of telecommunication services in New Zealand get access to high-quality, high-speed, and world-leading telecommunications. That is what we are committed to and that is what we are determined to see happen.

Hon David Cunliffe: Does the Minister agree with recently “Nationalised” pollster and blogger Kiwiblog that the Government should “please please please … don’t just take Chorus’ words for it, and make a decision based on a press release.” and instead call in the best independent accountants to verify Chorus’ claims; if so, does the Minister’s right hand know what the righter hand is doing?

Hon AMY ADAMS: As far as I can even understand the member’s question, I can assure that member that the Government does not make decisions based on press releases, which is why we are now, as I have said, carefully working through the implications of the pricing decision. We will do that very carefully before we make any decision. Can I reiterate to that member that our concern is to ensure that New Zealand gets access to ultra-fast fibre communications, because that is what is in the long-term interests of New Zealand. That is our focus in that regard, and that has always been our focus. But if that member is alleging that Chorus is making its numbers up—and I think comments to that effect have been made—then I would suggest that that is a very serious allegation. Chorus are under very strong disclosure obligations. If that is a concern that he has, then he should raise that with the appropriate authorities.

Voting

Correction—Marriage (Definition of Marriage) Amendment Bill

Mr DEPUTY SPEAKER: I wish to make an announcement in relation to a correction of votes. On 27 March, when the Committee of the whole House was considering the Marriage (Definition of Marriage) Amendment Bill, the results of three votes were announced incorrectly because a member voted in person and had a proxy cast for him. The correct results for the votes on amendments proposed by Mark Mitchell, Tim Macindoe, and Dr Paul Hutchison are in each case one less for the Noes. The corrected results make no difference to the outcome of each vote. The record will be amended accordingly.

Bills

Human Rights Amendment Bill

First Reading

Debate resumed from 22 October.

LOUISE UPSTON (National—Taupō): I am pleased to support the Human Rights Amendment Bill.

A party vote was called for on the question, That the Human Rights Amendment Bill be now read a first time.

Ayes 105

New Zealand National 59; New Zealand Labour 33; New Zealand First 7; Māori Party 3; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 15

Green Party 14; Mana 1.

Bill read a first time.

Bill referred to the Justice and Electoral Committee.

Bills

Telecommunications (Interception Capability and Security) Bill

Third Reading

Hon AMY ADAMS (Minister for Communications and Information Technology): I move, That the Telecommunications (Interception Capability and Security) Bill be now read a third time. Can I begin by thanking members for their work on this bill. It has been given a thorough examination with considerable consultation with industry and stakeholders, and the subsequent amendments have made a good bill better. The fundamental reason that I have sought to introduce this bill is to safeguard New Zealand public safety and security. This will be done by ensuring that it is technically and practically possible for surveillance agencies to intercept communications where there is a warrant or other lawful authority to do so, and by introducing a formal framework to ensure the security of our telecommunications networks.

Interception of telecommunications plays a vital role in investigating, disrupting, and prosecuting serious crime; detecting and prosecuting international and domestic cyber-crime; combating threats to national security; and responding to emergencies. As the Police Association has said in its support of this bill, the “lawful interception of telecommunications … is a crucial aspect of police investigations.” In fact, the Police Association said itself that “There are very few serious crime investigations where telecommunications interception data is not important.” The information “can be used to prove a motive, to prove an association between people, to track movements related to other persons or evidence, or otherwise to build a picture of a suspect’s movements or activities. … Police use of interception capability, however, also extends beyond crime investigations to missing persons investigations, [for example] where every minute counts. Successfully locating a missing person … relies on telecommunications data being obtained in an efficient fashion.”

In New Zealand we are changing the way we use our telecommunications. We are increasingly online, chatting, texting, and sending emails rather than calling on our home phones. It is critical that our legislation keeps pace with these changes and allows surveillance agencies the ability to help keep New Zealanders safe. We are also in the process of building greater internet and mobile connectivity. Initiatives like the Ultra-fast Broadband Initiative, the Rural Broadband Initiative, and the allocation of radio spectrum for fourth-generation mobile networks will have a dramatic impact on New Zealand’s connectivity. Not only is the technology faster, smarter, and globally reaching but our industry has fragmented and we have seen a proliferation of new entrants in the market.

The first part of the bill, therefore, modernises the existing interception capability regime and ensures that obligations on the telecommunications industry are targeted, futureproof, and flexible. It reduces the obligations for many network operators, making their obligations more in-line with actual operational need. A number of network operators will face substantially reduced compliance costs as a result. Industry members told me that the current Act is inflexible and cumbersome. To address this, the bill allows for a faster and broader exemption process for interception obligations, which includes the ability to grant class exemptions.

The bill also provides the ability to specify standards relating to how network operators format the information to be given to surveillance agencies, which industry has told me will save it considerable expense. Given comments from some groups about the interception obligations, I want to clarify the following points. The bill does not change the authority of agencies to intercept telecommunications, and it does not change existing privacy protections. This bill relates only to real-time interception. It does not require data to be stored nor stored data to be disclosed.

The second aspect of the bill puts in place a formal network security framework to help keep New Zealanders safe from unwelcome intrusions on our telecommunications networks where those intrusions can seriously affect our national security. Individuals are increasingly reliant on the internet and information and communications technology. Many of our critical infrastructure providers, including our electricity, gas, and finance providers, are reliant on the security of their telecommunications networks. Our increasing reliance on these networks means that we are evermore vulnerable to cyber-attacks, and it increases the potential scale of loss and damage that they can cause. A network security regime is an important part of a wider, multi-pronged approach to managing cyber-threats. The regime in the bill is necessary to ensure that our networks are kept safe from unauthorised access or the unauthorised copying, altering, or diverting of data. Until now, New Zealand has not had a formal scheme in place to effectively manage and address potential national security risks associated with our public telecommunications networks. Instead, the Government Communications Security Bureau (GCSB) currently works in partnership with a number of network operators to ensure proportionate and appropriate measures are in place to protect the security of the networks.

This bill will formalise and build on these existing partnerships to ensure that all network operators engage with the Government, and give certainty and clarity to network operators about when, how, and on what to approach the Government. Network operators are facing new and ever-increasing threats that are advanced, persistent, and sophisticated. In this area the GCSB has access to specialised information about potential vulnerabilities and threats. Network operators simply do not have access to this level of information, which can make it difficult for them to make informed decisions about the design, build, and operation of their networks. I want to be clear about the scope of this framework. This is not about the GCSB getting involved in the day-to-day management of the network, nor is it about it having open access to a network. It has no power to dictate what may go in or be used in a network. Instead, it is about building partnerships to keep networks safe, thereby reducing risks posed to national security. The network security framework will give network operators and the GCSB the ability to work together in a structured and consistent way, and it will show that New Zealand is taking network security seriously, making it a more attractive place to do business.

The compliance framework that underpins the bill builds on the framework in the current Act but makes it more flexible and appropriate. A two-tiered enforcement system will see minor breaches of compliance dealt with by way of breach notice, while serious non-compliance will still be dealt with in the courts. This is a welcome change to the current regime, in which all non-compliance must go straight to the High Court. In the rare event that court proceedings arise from matters in the bill, protections have been put in place to protect any classified security information so that it will not disadvantage the non-Crown party. Provision has also been made to appoint a special advocate to assist the non-Crown party by accessing the classified information on their behalf. These provisions were strengthened during the select committee process to provide additional protection to network operators and service providers in court proceedings.

There has been much talk about the definitions in this bill and to whom they actually apply, so let me be clear: the definition of “network operator” has not changed from the current Act. This definition has been sensibly applied since 2004 and has not caused problems in practice. If a company does not have obligations today as a network operator, it will not have obligations arising from this bill as a network operator. The bill puts beyond doubt that the definition of “service provider” includes companies domiciled both within New Zealand and overseas if they make their telecommunication services available in New Zealand. Service providers already have a duty to assist when they are served with an interception warrant, and this duty remains.

The Telecommunications (Interception Capability and Security) Bill is an important piece of legislation. It modernises the current framework, provides clarity and flexibility for the industry in relation to interception obligations, and will allow us to keep pace with future changes in the telecommunications sector. Maintaining law and order and national security is crucial to a well-functioning society, and keeping our networks secure is the first line of defence against adversaries. I commend this bill to the House.

CLARE CURRAN (Labour—Dunedin South): The Telecommunications (Interception Capability and Security) Bill is a shoddy, badly drafted, badly constructed, undemocratic piece of law that degrades the privacy of New Zealand citizens and New Zealand businesses. We will not and do not support it. The Minister for Communications and Information Technology should be ashamed to have put this legislation before this House in this form. When Labour wins Government next year, this law and its accompanying legislation, the Government Communications Security Bureau (GCSB) legislation, which has turned into law, will be gone. A comprehensive and independent review of our surveillance organisations, in particular the GCSB, followed by new security legislation with checks and balances, and new legislation that ensures that the privacy of New Zealand citizens and business is protected, particularly in the digital environment, will be implemented. Twin pillars—that is what we require; twin pillars of legislation and of democracy for both privacy and security. It is not an either/or; it is both.

I would like to refer to a third reading speech on the GCSB legislation—the speech by David Shearer, where he said: “We will act on day one in office to commission the full review that we have promised. We will seek agreement across this Parliament for terms of reference … We will replace this law”—and that is the GCSB law, and today I am saying the same about the Telecommunications (Interception Capability and Security) Bill—“with a world-leading one that is based on the findings of that comprehensive inquiry, because the only way we will ever win back people’s trust, which has been so sadly lost right across this country, is to get an enduring solution that works in the best interest of this country.” That is the Labour Party’s unequivocal position on this piece of shoddy legislation.

This legislation provides enormous powers—enormous powers—to the GCSB, to other agencies, and to Ministers, including the Minister for Communications and Information Technology, who spoke just before me. There has been no case made during the passage of this legislation for the enormous powers that it is providing to the GCSB and to Ministers—enormous powers, particularly in the definitions and in Part 3 of the bill. There are no appropriate checks and balances and no independent scrutiny accompanying them. The only independent remedy open to people who have disagreed with what is happening behind closed doors, in private, is to seek a judicial review. That is at the very end of the process. The economic impact on networks as a result of this bill could be very serious. That is why I have introduced a member’s bill that amends this bill in the interim, before Labour wins Government. It would create a technical advisory board to act as a buffer against the GCSB and against a Government Minister exercising surveillance powers with no independent scrutiny or accountability. At least that would provide some measure of checks and balances that would go some way towards mitigating the effects of this bill.

This bill enables the GCSB to go into our telecommunications networks to control the means through which we send and receive communication. It enables the GCSB to recommend to the Minister that the Minister gives it extraordinary and secret powers over a service provider—over any one of these networks, such as Gmail, such as Facebook, such as websites, and such as Skype. Services caught up in the definitions in the bill could include any website or interactive piece of software. Organisations that could get caught up include schools, universities, and libraries. That may not be the Government’s intention, but it is the result of this badly drafted law. It is the result of a Minister who has refused to listen to submitters and has refused to listen to the public who have questioned what the widespread implications are of this piece of legislation. When the Minister said that nothing has changed in the definitions—well, the technology has changed. The technology has changed, and that is where the problems arise in this piece of legislation.

This piece of legislation will create a chilling effect on New Zealand business. The Minister has been warned over and over again and New Zealand businesses have pleaded that this bill creates ambiguity around the definitions of what constitutes a network, and provides powers that are too broad and without checks and balances to the GCSB and to individual Ministers, including herself.

The potential costs, which have not been properly debated in this House, of this legislation are enormous. I want to refer to some of them today, because there was a set of supplementary submissions provided to the Law and Order Committee that was not allowed to be taken into account during discussions in the select committee. The submissions were not allowed to be discussed, officials were not allowed to comment on them, and we were not allowed to seek any extra advice on the implications of those costs. I want to refer to what some of those costs are. For instance, 2degrees, which is one of the telecommunications companies, produced a submission saying that the likely impact would be many millions of dollars “from lost revenue, damage to brand and customer satisfactions, and lost sales opportunities.” This was in regard to just one part of the law. It said that many millions of dollars could be added if there is added delay restoring customer service, and major delays could result in severely dented customer confidence and revenues that, it added in its submission, could be fatal to the business.

Even Chorus put in a supplementary submission on this piece of legislation. It said that there was potential to impose significant costs on network operators. It said that it could not provide exact costs without knowing what concerns the GCSB or the Minister may raise or want remedied, but there was potentially very wide scope and, therefore, considerable uncertainty as to the cost implications. Vodafone also gave a submission on the costs. It said that the bill could result in a reduced level of competition from vendors, with consultation introducing delays in network projects, and that these could be very significant. Finally, Enable Networks, which is rolling out ultra-fast broadband around the Christchurch and Canterbury region—the Minister’s own region—gave more specific costs. It said that there could be $150,000 per annum just for operational changes to change its business. It said that there could be a $400,000 per year difference as a result for its annual operating expenditure. If there was a requirement for it to change a vendor within its business, then that could cost in excess of $50 million—$50 million. That is extraordinary. Another thing that has to be mentioned is whether or not there is the capacity for the GCSB to undertake these new powers in their current state without a proper review taking place.

This is a very poor piece of legislation. The context in which it is being debated is ill-thought-out and rushed. It is in the context of widespread spying allegations across the world to which New Zealand should be paying attention. There should have been a widespread public conversation about what the justification was for this law, where the evidence was that this law was needed to provide those powers, and what the privacy implications were for New Zealanders.

JACQUI DEAN (National—Waitaki): The Telecommunications (Interception Capability and Security) Bill has two key elements in it: it modernises the existing requirements for telecommunications companies to assist with interception, and it introduces a formal framework to protect network security. These two elements are reinforced by a robust framework to ensure compliance with them—and that is it. The bill replaces the existing Telecommunications (Interception Capability) Act, which was passed 9 years ago by the then Labour Government. The bill under consideration—in its third reading today—updates the legislation to reflect the changing structure of our telecommunications industry, and to ensure that our interception regime stays current with technological changes. Providing telecommunications providers with greater certainty and transparency about their security obligations helps to minimise compliance costs and ensures a flexible, workable telecommunications security system. The telecommunications industry as a whole benefits from each operator having certainty about their security obligations.

I will now say just a few words about what this bill does not do. This bill does not change the existing safeguards to protect people’s privacy. This bill does not change in any way the authority of agencies to intercept telecommunications. This bill does not require data to be stored or stored data to be disclosed. This bill relates only to real time, live interception, as does the current Act, which was brought to the House and passed 9 years ago by the then Labour Government. Under the existing Telecommunications (Interception Capability) Act, network operators already carry out interception, when this is required by a warrant or other lawful authority, to assist the police in solving crime, or the Security Intelligence Service, or the Government Communications Security Bureau (GCSB). That all happens under the existing Telecommunications (Interception Capability) Act, which was brought in 9 years ago by the then Labour Government.

The bill reduces the obligations on some network operators, mainly at the wholesale level, the infrastructure level, and network operators with fewer than 4,000 customers, to have the capability—and by that is meant the expertise and equipment—to intercept the telecommunications on their network and their telecommunications services. Again, this is already the case under the current legislation. Network operators will continue to have a duty to assist, when presented with a warrant or other lawful authority to intercept. The House should remember exactly why the police might want to intercept communications. Quite simply, that might be to solve a crime. Further, the bill makes clear that the existing requirement for service providers to assist with an interception operation, when presented with a warrant or other lawful authority to intercept, applies to companies, whether they are based in New Zealand or overseas, where their services are available in New Zealand.

The bill will require the GCSB and network operators to work cooperatively with each other in identifying and addressing network security risks, and that is to happen as early as possible. This will mean that network operators will be required to engage with the director of the GCSB on the design, build, and operation of their networks, where this may pose a risk to New Zealand’s national security. The process for network operators to follow after a risk is identified by the GCSB is set out in a specific risk identification and response process. Network security is important to ensure that networks are kept safe from unauthorised access or the unauthorised copying, altering, or diverting of data. The network security framework is a preventative regime built on a partnership approach. The bill does not give the GCSB the power to direct, approve, or veto network security decisions. Its role is to identify risks and to advise the network operator. Where the GCSB believes a significant risk to national security is raised, it can recommend to the Minister responsible for the GCSB that they issue a direction.

Finally, I want to commend the officials who worked on this bill. I did not get a chance in the Committee stage, which is normally the process in the House, but I do want to commend the officials, who gave good service to the Law and Order Committee, for their utter professionalism. They answered every question that was posed to them from every member. They were incredibly patient in what is quite a technical field, and, again, I want to just thank them for their expertise and for their professionalism. This is a good bill and I recommend it to the House.

GRANT ROBERTSON (Labour—Wellington Central): Members of the public listening to that contribution from the National Party member Jacqui Dean—if they are still awake—would be forgiven for thinking that this Telecommunications (Interception Capability and Security) Bill was just a small, technical bill, for which they should switch off, get up, and go make a cup of tea. Well, nothing could be further from the truth.

Shane Ardern: They’ve certainly done that now.

GRANT ROBERTSON: I am sure Mr Ardern will take a call and give us the benefit of his wisdom and insights into telecommunications.

What I can say is that members of the public need to see this bill in the context of its companion legislation, the Government Communications Security Bureau Amendment Act. It is all very well for Government members to talk about the technical amendments, and how this definition has not changed or that definition has not changed. The context for this piece of legislation was the passing of the Government Communications Security Bureau Amendment Act. That Act widely expanded the powers of the Government Communications Security Bureau (GSCB) and fundamentally changed its purpose from being an agency focused on looking at the activities of foreign nationals to being one that can look into the activities of New Zealand citizens.

The moment that change was made, the fundamental nature of the GCSB’s work changed and the implicit contract that New Zealanders have had with our security agencies changed. This bill is the legislation that operationalises those changes. They are fundamental changes to the way our security agencies work, and they should be given far greater attention by the National Party.

I want to say two or three introductory things about the context in which this legislation is being passed. We are in an environment where not only is technology changing rapidly but the way in which people use technology is changing. Alongside that are daily revelations from around the world about the extent of surveillance, the extent of the work of intelligence agencies, and the level of technological sophistication that those agencies are able to employ.

That is what has changed—I say for Jacqui Dean’s benefit—in the 9 years since the legislation was passed. The world has changed. In Europe right now we have governments hugely concerned at the activities of the United States, but this Government wants to bury its head in the sand. We have got congressional inquiries in America that are heading towards tightening up what intelligence agencies can do. President Obama wants to tighten up what intelligence agencies can do. The response of the National Party to that is to broaden the powers of intelligence agencies, making it easier for the agencies to involve themselves, as Clare Curran has pointed out, in anything from the design of a network in a school library all the way through to the operations of companies in New Zealand. The National Party has buried its head in the sand to what is happening in the world. New Zealanders know that the world has changed when it comes to security, but the National Government has not done that.

The world has also changed in the way in which people look at privacy. The question in this digital age is what privacy means and how we balance privacy with security, because both are vitally important when it comes to a democratic society. We cannot have a democratic society without privacy. We cannot have a democratic society without security. But it is not, as Clare Curran said in her speech today, one or the other. It is a false dichotomy that the National Party has pushed through that either you believe in security or you do not—that is it. Well, it is not that simple. What New Zealanders expect is a balance between privacy and security; that our basic rights and freedoms to communicate with one another without the State interfering will be upheld alongside keeping an eye on those people who will undermine our society. It is possible to do those things and to balance those two things together, but the National Party has failed to do that.

This bill tips that balance. This bill pushes more power into the hands of Ministers and more power into the hands of the GCSB, and takes away from New Zealanders fundamental rights and freedoms that they should be able to expect. That is the tragedy of this bill. I would have thought that the National Party would want to increase confidence in our security and intelligence agencies, because the very time at which it has chosen to expand these powers is the time at which public confidence in the GCSB, which plays the critical role in the implementation of this bill, is at an all-time low. In the GCSB legislation we were asked by the Prime Minister to accept that the limits on surveillance of New Zealanders would come as a result of the way he would go about implementing the law—the limits would result not from putting it in the law but from his promise to the House about how he would issue warrants. Well, that is not good enough.

What New Zealanders need to know is that the intelligence agencies of this country are acting in a way that is in accordance with our values as New Zealanders. That is why the Labour Party has been calling for some time for an inquiry into our intelligence agencies. It is not just about the GCSB; it is also about the SIS. In the context of this bill, we are seeing hugely extended powers given to agencies that the public no longer trust. The Government should have slowed down, it should have listened to the concerns of New Zealanders, and it should have undertaken a review and brought back to this House legislation that has the support not only of a wide range of parties in this House but of New Zealanders in general and of civil society.

The Government has failed. It is out of touch with the concerns of New Zealanders on this bill. The problem specifically with this bill is that it does create broad, sweeping powers. All the groups that came to the Law and Order Committee said “Don’t do this. Don’t do this, for the sake of the privacy of New Zealanders. Don’t do this, for the sake of innovative businesses in New Zealand being able to get on with their jobs.” Company after company came to the select committee and said “Don’t pass this legislation, because it will stifle innovation.” The Government, supposedly the friend of business, ignores them and ploughs on no matter what, saying “No, we’re going to do this.”, with that kind of arrogance, that kind of being so out of touch that it will not listen to even the people whom traditionally it has told us it supports.

One of the major concerns the Labour Party has about this bill is the broad definitions that are contained in the bill. It is actually ridiculous to hear Amy Adams get up and tell us that there is no change around national security. Well, that is actually not true to begin with, but also, again, it is in the context of what is now defined by the GCSB as what it can do for national security. We then have the question of network providers and service providers. Both of those terms are so loosely defined that we do have the situation in which it is possible that schools, universities, hospitals, and so on end up being caught up in this. That is the kind of sloppy legislation that we have in front of us today. We also do not have adequate oversight. The Labour Party attempted to see the establishment of a technical advisory board so that at the very least there would be some kind of oversight from people outside of the Ministers’ control, but, again, that was rejected by the Government.

I want to finish my contribution on the matter with the submission of the Human Rights Commission on this bill, because that highlighted two things. The first of them was the arrogance of the Prime Minister, whose reaction to the submission was to tell the Human Rights Commission that he was going to cut its funding. Well, he should have read the submission. He should have read it and he should have understood that the Human Rights Commission, using its statutory power, which it has used only a handful of times in its existence, was crying out to the Government, saying “You’ve got this wrong. You’ve unbalanced human rights and security.” But the Government ignored the commission.

In that report from the Human Rights Commission it actually says that New Zealanders believe that they are entitled to know whether there is mass surveillance of them; that they need more clarity, information, and transparency; and that they believe that there should be a thorough investigation of all of the agencies before any law such as this is passed.

The Human Rights Commission was calling out the Government on a piece of law that tramples over the basic rights, freedoms, and values of New Zealanders. Instead, the Government has pushed through the Government Communications Security Bureau Amendment Act and it has pushed through the Telecommunications (Interception Capability and Security) Bill against a global tidal wave of concern. The Government needs to stop. It needs to listen. Instead, it has gone ahead, and New Zealand now has law in this area that is outside the mainstream of world opinion. It puts at risk the privacy of New Zealanders. It puts at risk the innovation of companies in New Zealand. It is a dreadful piece of legislation that should not pass.

Dr RUSSEL NORMAN (Co-Leader—Green): I rise on behalf of the Green Party to speak about the Telecommunications (Interception Capability and Security) Bill. This is a bill that the Government has been promoting alongside the Government Communications Security Bureau (GCSB) bill, which is its sister bill, to enhance the powers of the GCSB to engage in large-scale spying of citizens both here and, of course, abroad. Essentially, what this bill does is enable—by providing the technical ability, if you like—the GCSB to spy on New Zealanders, as well as other agencies. It also goes alongside enabling foreign spy agencies to spy on New Zealanders, using the GCSB.

I think what we probably need to say at the outset is that, essentially, signing up to this kind of legislation is part of the price that we pay for membership of the “Five Eyes” network. The “Five Eyes” network is a network between five countries that have worked together—the United States, the UK, Canada, Australia, and New Zealand—in order to engage in large-scale surveillance. The revelations about the true nature of this “Five Eyes” network, which have become almost daily now as a result of Edward Snowden, have become daily shocking news to people all around the world, as we have discovered exactly what it is that our spy agencies are doing. Of course, they never told us what they were doing, but as a result of these massive leaked documents, we now understand what they are doing. Essentially, the “Five Eyes” network has engaged in global mass surveillance. It has particularly targeted the submarine cables that go between nations, and it has taken all the data off those submarine cables in order to intercept all the communications that are going on there. So that has been able to intercept a lot of the emails, the internet traffic, and so forth going between countries.

But on top of that, the network has been monitoring the domestic communications of certainly the “Five Eyes” countries but also many other countries as well, particularly, as it has turned out, in Europe, as we found out in the last week. What that means is that it monitors the mobile phone network, it targets particular telephone numbers, such as the phone of the German Chancellor, Angela Merkel, who was targeted by the NSA so that it could listen to all of her telephone calls. Of course, any other person or persons, any other corporations, or any other kinds of organisations that the “Five Eyes” network wants to target, it simply legally or illegally—it is of no concern to them—taps in and simply gets all that data about what is being talked about, the information that is being exchanged. All of this is now just a matter of fact. There was a time not so very long ago when this was a matter of conjecture, it was a matter of dispute, but now it is simply a matter of fact. We find that the European Union and the United States are now engaged in a very large dispute, as the truth has been revealed and we discover that, in fact, the United States has been systematically spying on the European Union.

On top of that, of course, we find that other members of the “Five Eyes” network have been engaged in a similar kind of spying. This bill is in order to enable that kind of activity. So, for example, the Australian equivalent of the GCSB and the SIS has been engaged in spying on Australians—not only on the telephone network of all the private conversations of Australians but also in using their embassies in Indonesia to target the Indonesians. Now the Indonesian Government, even in the last hours, is threatening to review cooperation with the Australian Government over the so-called boat people, as a result of that systematic spying by the Australian Government on the Indonesian Government and other officials.

We know also that it is not just Government officials who are being targeted. The NSA has been targeting private corporations. Petrobras in Brazil was one of the targets, and, presumably, the NSA was targeting it for economic reasons. Petrobras is a major oil producer, so the NSA was very interested to know what Petrobras has been up to, in order to communicate that to US corporations in any of their dealings with it.

The “Five Eyes” network is a global spying network, a club of which New Zealand is one of the members. There was a time when that was crowed about by many people as a great thing—that we were members of this club. However, I think what we are finding now is that being a member of the “Five Eyes” club has its downside. It is extraordinary that at the very moment that the downside of being a member of the “Five Eyes” club means that nobody trusts you, this Government is introducing laws that give more and more powers to the spy agencies, in order to spy on us and our activities, and also to spy on people in other countries and share that information among the “Five Eyes” network. The fact is that at this exact moment, when it is all being revealed as to the illegal and illicit activities of these agencies, the Government is proposing to give this network more power, and that is an extraordinary thing. We are fundamentally caught up in this international scandal as a result of the activities of this Government and previous Governments, which failed to control the GCSB and the SIS. We, just as much as the US and all other members of the “Five Eyes” network, are now being caught up in this thing, and we are all being seen as countries that cannot be trusted.

That, I think, is a strong argument for an independent foreign policy. It is just like when we went nuclear-free; there were those who said that we could not possibly go nuclear-free or it would be the end of the world. Well, it turned out that it was not the end of the world when New Zealand went nuclear-free. The United States pulled the pin on the ANZUS Treaty. Well, it turned out that that was not the end of the world either. So just as small independent countries all over the world have found that they do not need to be part of the US networks, these kinds of surveillance networks, and just as we found that we did not need to be part of the US nuclear network, it is really time for New Zealand to take an independent foreign policy. It is very difficult for New Zealand to have an independent foreign policy while we are a paid-up member of the “Five Eyes” network, which means that we must exchange all this information with other countries. When foreign dignitaries come to our country, no doubt we are spying on them. When the UN Secretary-General visited New Zealand, no doubt the GCSB and the SIS targeted its communications and passed the information back to the NSA in the United States because that is the nature of the “Five Eyes” network and how it works. Anyone who saw the obsequious and embarrassing performance of Jonathan Coleman in Washington will know that it is time for New Zealand to have an independent foreign policy.

I just happen to have returned from the European Parliament, and what was amazing there was how the European right has now become very sceptical of the relationship with the United States. The European left and European Greens were sceptical of the relationship for a long period of time, but now the European right is very sceptical of that close and intimate relationship with the United States because it sees that as very damaging to it. For example, when I spoke with some members of the European Parliament—from the Christian Democratic Union, which is Angela Merkel’s right-wing party governing in Germany at the moment—they were absolutely scathing about the United States and the US mass surveillance. Of course, the reason they were particularly scathing of it is that they remember the mass surveillance society of East Germany. They remember the Stasi. They remember the Soviet-backed regimes in Eastern Europe and what it was like to live when you were constantly spied on by the State. Of course, what we find out now is that that is exactly the kind of society we live in, where the GCSB, the SIS, the NSA, and equivalent agencies overseas like the Government Communications Headquarters in the UK, are all engaged now in mass surveillance of all of us and our private communications. Legally or illegally is of no interest to them; they simply engage in it when it suits them.

What this means from the Europeans’ point of view is that they are now saying that it is time to establish a kind of separate part of the internet for the European Union. The European internal market commissioner has called for a European data cloud separated from the American data cloud, so that those kinds of communications do not pass through the “Five Eyes” jurisdictions where that information is accessible. The justice commissioner has called the new data protection laws in Europe a European declaration of independence. What they mean is that they do not want to have their data flowing through countries like New Zealand where that data will simply be handed over to the NSA. So countries like New Zealand that implement laws like this very one put in front of us today are becoming places that are considered hostile for data storage. They do not want to put data storage in places where if you base the cloud data and servers in New Zealand, or even pass it through New Zealand, it can be easily picked up and handed back to the United States. This is a major economic problem for New Zealand. New Zealand should be a place where data is secure. One of our advantages is actually around the information and communications technology sector—that we have green energy, and that if we had a second cable, we would have better connectivity to the world, and that we would have a certain level of creativity, which could make us a great base for data services in the information and communications technology sector. But that is being threatened by this bill in front of us, which will result, and companies know this, in companies having to simply hand over the data or that there will be a back door into their data storage servers so that the Government can simply grab the data at will and hand it over to the United States. That is fundamentally undermining the way that I would see we should be establishing an information and communications technology sector in New Zealand, which is based around the cloud, but it is very difficult for that to happen.

We do not know as to what level the Balkanisation of the internet like this will happen, whether it goes further, but we do know that this kind of law undermines our ability to be world leaders in the information and communications technology sector, which should be one of our growing and great sectors. That is, of course, on top of all the issues around democracy and living in a free and open society, which are fundamental to the things that we believe in and that this law threatens. The very idea that you can have a private communication is threatened by this law. So there are not only economic reasons but fundamental democratic and privacy reasons for opposing this law, which is just so backward-looking.

MARK MITCHELL (National—Rodney): Our national security, fundamentally, is very, very important to all of us. It is something that should be taken seriously. I was very disappointed with the contribution made by the Opposition Leader of the House on the Telecommunications (Interception Capability and Security) Bill. He spent most of his speech attacking other members of the House, which probably indicates that, really, he did not have that much to contribute. One thing that I did agree with him on was the fact that threats have changed a lot over the last decade. In the last 10 years there have been significant changes to the types of threats that we have to be aware of and try to detect. Hence, we have to keep updating and changing our legislation to stay in step with those threats.

New Zealand, in terms of transparency and oversight levels, has one of the highest levels of transparency and oversight of our agencies, which are there to provide protection for us, of any country in the world. I would defy anyone to name somewhere that has a higher level of transparency.

Unfortunately, I can take only a short call on this, but I just wanted to finish by highlighting again that this bill does not change the existing safeguards to protect people’s privacy. It does not change, in any way, the authority of agencies to intercept telecommunications, and it does not require data to be stored or stored data to be disclosed. I am very happy to commend this bill to the House. Thank you.

RICHARD PROSSER (NZ First): I am pleased to rise on behalf of New Zealand First to speak to this third and final reading of the Telecommunications (Interception Capability and Security) Bill. I am pleased, but I have to say—and this is becoming something of a habit with too much of this Government’s legislation—that I am a little disappointed as well. New Zealand First is opposed to this bill. We began the process of this piece of lawmaking by giving it our qualified support. We supported this bill at its inception because we believed, and still believe, that it was a necessary act of legislation in so far as its stated intentions were concerned. But that we can no longer support its passage into law is the source of my disappointment. I am disappointed that yet again this Government, this National Party Government and its associated hangers-on, has managed to address a necessary and pressing issue by hitting the nail squarely on the thumb. I do not think those members lack intelligence. There are some particularly fine minds amongst the members occupying the benches opposite. Rather, I think it is but another manifestation of the old-time Tory born-to-rule mentality that sees no need to consult or to listen or to think beyond its own immediate impressions and opinions. It is incapable of being wrong, in its own view, and thus it is unable to absorb reason if such reason is applied externally, and change course in place of it. We have attempted to find a way through what has proven to be an impasse, as far as the two separate agendas of this bill are concerned.

New Zealand First has suggested that the bill be split into two bills in order to deal separately with the two major areas that it addresses. By way of explanation I will quote from the minority view that New Zealand First submitted to the Law and Order Committee report: “New Zealand First holds the view that the issues covered by this bill are too broad and disparate to be dealt with by a single piece of legislation. Network security is a pressing issue which requires the timely attention of the House, and the expeditious passing of legislation to facilitate the protection of New Zealand’s data networks by way of the exclusion of [risk-bearing] hardware … This we regard as being a singular issue, which we support. Interception capability however is both a less urgent concern, and one which has generated a great deal of controversy. We note that an overwhelming majority of public and industry submissions are opposed to some or all of the proposed legislative changes. There are unresolved issues and unanswered questions surrounding the cost to network providers, the exclusion of smaller providers, the non-inclusion of over-the-top service providers, and the commercial implications of having OTT providers subject to requirements which may limit the availability of certain products and services to the New Zealand market. In addition, several submitters suggested that aspects of the proposed changes may limit innovation and expansion in some areas of information technology in New Zealand. Many submitters were of the opinion that the exclusion of small providers, and of OTT services, would largely negate the effectiveness of the law as proposed. While these issues remain unresolved, and while existing legislation provides for an alternative framework through which the aims of the bill may be addressed, we feel it is precipitous to [proceed] with this part of the bill. New Zealand First suggests that the bill be divided into two distinct bills, [in order] to address these separate concerns. We may yet choose to pursue this option by way of a supplementary order paper.” That did not happen. “In the event that the bill is so separated, New Zealand First will support the network security provisions as outlined. However as the bill [presently] stands, we are unable to support it in its entirety, due to our concerns as detailed here.”

Unfortunately, the Government has not seen fit to take heed of our concerns. For that reason we find ourselves in the position of having to withdraw our support for this bill. Network security is, of course, primarily concerned with the hardware that is proposed to be provided by one particular supplier based in Asia. The so-called “Five Eyes” partners, the Anglosphere nations with whom we share much in the way of intelligence, have made no secret of the fact that they do not trust the supplier, and they are equally clear in their requirement for New Zealand to not expose ourselves—and, by association, them—to the risks involved in allowing this company to conduct espionage on behalf of their Government shareholder on our systems via bugs embedded in its commercial hardware.

But there are other concerns as well. In view of recent disclosures in the Guardian and the New York Times, citing documents provided by Edward Snowden, the bill raises significant issues for New Zealand businesses and individuals conducting their business online. A primary concern is retaining privacy and confidentiality between that business and the intended recipients. It would appear from the allegations raised in those newspapers that those communications may well be intercepted in whole or in part. This raises additional serious concerns regarding confidence in undertaking business with New Zealand - based companies by businesses or entities located outside the traditional five English-speaking countries, with regard to the security and confidentiality of their communications to this country.

There is a foreseeable adverse commercial consequence from this loss of confidence, namely the substitution of New Zealand businesses with those in jurisdictions in which they may have more confidence in confidentiality of communications. This has a potential major impact, particularly on rural and remote-based businesses in New Zealand, where the ability for face-to-face meetings and the physical transfer of documents is far less practical. An apparent unintended consequence of this legislation is a potential detrimental reduction in the economic benefits that the internet and high-speed broadband had ostensibly offered, to mitigate both rural isolation and New Zealand’s geographic isolation. One must ask how rural National Party members will justify to their rural constituents their acquiescence in enabling this legislation to pass with these foreseeable adverse economic consequences for those who elected them. This bill represents the wrong approach to a serious problem. New Zealand First cannot and does not support it. Thank you.

IAN McKELVIE (National—Rangitīkei): It is a pleasure to take a brief call on the Telecommunications (Interception Capability and Security) Bill. I find myself disagreeing with the previous speaker, Richard Prosser, which is sad because some of the things he says from time to time I agree with. I do agree with the fact that there are some very intelligent people on this side of the House, however.

Hon Phil Goff: Name them.

IAN McKELVIE: I certainly will not name myself. I am proud to belong to a Government that has the courage to do what is best for New Zealanders, the courage to preserve democracy in a time of great change and a time when the telecommunications industry is changing by the minute.

Grant Robertson talked about the broad powers that this bill contains. He talked about a lot of issues related to this bill that led me to believe that he did not understand the legislation. He, in my view, is arrogant in himself and in his disregard for the well-being of law-abiding and hard-working New Zealanders.

We then heard the Greens take a similar approach through their leader distorting the truth of the matter even further by linking our operations and legislation to the rest of the world in a manner that is clearly untrue. I think he must have been out there in that jungle he has created on the front lawn.

We then heard some more, I guess, scuttlebutt from the other side of the House that clearly misrepresented the intention of this bill, and in my view leads to the undermining of public confidence in our security services, which are extremely strong.

We sat through a number of submissions and a significant amount of work on this bill to get to the point we are at today. I have a great deal of pleasure in supporting this bill, and I am sure that it will create an environment and do the job that it has set out to do in protecting those New Zealanders who need protecting from the rest of the world. Thank you.

Hon PHIL GOFF (Labour—Mt Roskill): Labour is opposed to the Telecommunications (Interception Capability and Security) Bill. It is shoddy, it is rushed, it is inadequate to do what it sets out to do—that is, to provide protection against terrorists or international criminals; the officials told us that—and it is absolutely inadequate in terms of providing protection to ordinary New Zealanders going about their lawful business, and in terms of the ability of the State to intercept their communications without adequate scrutiny and without adequate safeguards.

What this bill does is two things. First of all, it increases the power and the ability of the State to intercept private conversations between people over the telecommunications network, and it also expands the State’s powers to actually direct the telecommunications companies to do certain things or not to do certain things. But what really worries me about this is that this bill is the bill that is required to implement the changes made a couple of months ago in this Chamber through the legislation arising out of the Government Communications Security Bureau and Related Legislation Amendment Bill. That legislation, which Jacqui Dean seems to have overlooked, made a fundamental change in the power of the Government Communications Security Bureau (GCSB). That bureau was not previously lawfully able to spy on New Zealanders. As a result of that legislation, it now can do that. You know, it is funny—we had the GCSB legislation in this House because the Government was found to have abused its powers. It unlawfully spied on Kim Dotcom, and when it set up an inquiry into that unlawful spying, Rebecca Kitteridge found that it had done it on 88 other occasions. So you find that the bureau has been abusing its power, and what is the Government’s answer to that abuse of power? It is to make the abuse of power lawful. It is not to stop the abuse of power, and that is absolute nonsense.

We live in an age when the State can exercise remarkable power over its citizens, and we are seeing that every day through the revelations of Edward Snowden, who was the United States whistleblower. What has he exposed about the National Security Agency in the United States? He has exposed that it is intercepting and looking at not tens, not hundreds, not thousands, but millions of pieces of communication. It is communication not by terrorists, not by international criminal gangs, not by those who are trying to break into the cyber security of other systems, but by ordinary Americans and by ordinary people around the world. It is even spying on its friends. It is spying on the Chancellor of Germany, an ally of the United States.

Then we had the grovelling performance of the Minister of Defence, who goes over and meets the Secretary of Defense in the United States and says “We trust you not to spy on us.”, and he gives the secretary a rugby jersey. Was that not sweet?

Hon Dr Nick Smith: What would the member have said?

Hon PHIL GOFF: I would have asked the obvious question. There is an agreement under “Five Eyes” that said that you do not spy on your allies. We want to know what they are doing. I want to tell you this, Mr Smith: Mr Coleman said we had no secrets. Well, apparently we do, because the Government will not tell us what it is negotiating with the Trans-Pacific Partnership, but it does not mind if the Americans are eavesdropping to find out what our negotiating position is. Apparently, there are no secrets, but actually, Mr Smith, we have New Zealand companies competing with their American competitors. I do not know whether you, Mr Smith, feel comfortable about the fact that they might be spying on what New Zealand companies that are in competition with the Americans are doing in this country, but I am not comfortable with that. Dr Coleman should absolutely apologise for that fawning, grovelling interview that he did with Secretary of Defense Hagel.

We can see that there is a real ability to abuse the powers in this bill and that it happens both in New Zealand and around the world. We can see that there are inadequate protections, because our Government Communications Security Bureau has unique powers to intrude on your privacy or the privacy of any New Zealander in this country. If we are going to give security agencies those sorts of intrusive powers, then it is incumbent on this House to ensure that there are proper oversights so that we can be sure that those powers are not being abused.

When we had the Government watchdogs and New Zealand watchdogs against the abuse of State power come before the Law and Order Committee, what did they tell us? They said that this bill should not proceed. They said that there are not adequate safeguards, and that what the Government is bringing before this House is not satisfactory. Take the New Zealand Law Society, for example. It says that there needs to be “systemic checks that should be put in place to ensure the GCSB powers that are to be extended by the amendments are exercised appropriately.” What does the Law Society say? It says that those checks have not been put in place. It says that this bill is intrusive and that it “empowers the GCSB to spy on New Zealand citizens and residents, and to provide intelligence product to other government agencies in respect of those persons”. It says that this bill is inconsistent with the New Zealand Bill of Rights Act and is inconsistent with privacy interests recognised under law in New Zealand. That is the Law Society. And what does the Attorney-General say? “What would the New Zealand Law Society know about the law and the Bill of Rights?” It is its job. That is arrogance, Mr Smith, and you know it.

Then we have the Human Rights Commission. Mr Smith, the Human Rights Commission is appointed by this Government, and what did it say? I want to quote it to you, Mr Smith. “The Commission considers that what is proposed by the GCSB Bill and the TICS Bill is too wide-reaching. It does not provide adequate oversight, and makes inadequate provision for ensuring appropriate transparency and accountability of those who administer the legislation. It does not provide for a legal regime containing sufficient safeguards against abuse of power and to facilitate a proportional approach.” The primary recommendation of the Government’s own Human Rights Commission is “that a full and independent inquiry into New Zealand’s intelligence services be undertaken”—this party’s position. What was the response of that Government to its own Human Rights Commission saying that this legislation should not be before this House? The arrogant and overbearing response of that Government was to threaten the funding of its own Human Rights Commission. Did it listen to the watchdog that it had set up that warned about this legislation? No, it threatened that watchdog and said “We’ll withdraw your funding if you’re critical of the Government.” Frankly, that is an absolute disgrace, and the Government should apologise for what it has done after it withdraws this legislation.

Then we have the Privacy Commissioner. The Privacy Commissioner is a woman who understands how our system works. She was, for more than a decade, the Secretary of the Cabinet. She knows the secrets of Government. She is a practical and wise person. She says this legislation should not proceed in this form, and that this was not the right model of oversight to guarantee that we had protections against abuse.

So I ask the next National speaker who gets up to speak on this bill to say why each of those watchdogs is wrong in what they are saying, to say why adequate oversight has not been built into this legislation, and to say why the Government is ignoring the overwhelming evidence of how these intelligence agencies quickly abuse their power and, in fact, how our own Government Communications Security Bureau has abused its power. This legislation is not adequate. It is not in the right form. We were told it would not stop the serious terrorist groups, because they know how to avoid those communication companies that are subject to interception. It will not work on them, but it will allow this Government to spy improperly on New Zealanders going about their lawful business.

New Zealanders are right to be concerned about this Government. They are right to be concerned about its arrogance. They are right to be concerned about how out of touch it has got in 5 short years. We oppose this legislation, and we will, Dr Smith, change this legislation and change the Government Communications Security Bureau legislation that is so badly drafted and so lacks safeguards.

MIKE SABIN (National—Northland): Unfortunately, that member Mr Goff, after many distinguished years in this House, has not learnt that just because he says something loudly, it does not actually make it factually correct. The trouble is—and Mr Goff summed it up right at the end of his speech—that he is trying to somehow tie this bill, the Telecommunications (Interception Capability and Security) Bill, back to the Government Communications Security Bureau (GCSB) legislation and the flaws that actually that Labour Government passed quite willingly. It swept that one under the corner of the carpet. This bill has got nothing to do with that legislation, and the member knows that. What disrupts the credibility of that party is that it keeps trying to tie back legislation to something that is all about a scandal, because it—

Dr David Clark: Read the bill.

MIKE SABIN: I have read the bill.

Dr David Clark: You said this isn’t related to the other bill.

MIKE SABIN: Well, actually, I say for that member that what this bill will deal with more is the gangsters who are out there manufacturing P and getting away with blue murder in what they do, and the means by which the powers that have warrants to intercept those communications access those communications from the agencies. It is nothing more than systems and processes. It does not in any way change any existing safeguards.

Although people on that side of the House want to whip up some sort of conspiracy, the New Zealand public have long ago woken up to the story that members on that side of the House are crying wolf, saying “Oh, please believe us; it must be a conspiracy.”, and manufacturing this, that, and the other. But it does not stick, because you do not make sense—sorry, not you, Mr Assistant Speaker. Those members do not make sense in their argument.

This bill does not change the authority. It does not change the way that those organisations have to go about getting warrants to intercept the information. There is nothing to see here. There is nothing to see but an Opposition party that is floundering around trying to whip up a crisis where there is not one to see. New Zealanders back a Government that actually gets on and protects their interests and does not dilly-dally and play politics.

The ASSISTANT SPEAKER (Lindsay Tisch): I understand that the next call is a split call.

Dr DAVID CLARK (Labour—Dunedin North): Well, that member, Mike Sabin, would do well to take a leaf out of his own book—explaining that yelling does not make things true! I found the irony of that delicious—just delicious. I fear that that member has not read the bill, because the connection to the previous legislation that was passed, the Government Communications Security Bureau (GCSB) legislation is not in dispute here in this House. The Law Society, acknowledging that this type of legislation is responsible for striking a balance between privacy and security, made a very full, adequate, and interesting response on the GCSB bill and on the Telecommunications (Interception Capability and Security) Bill—the related pieces of legislation. If I can read from their submission on this bill, the Law Society says in paragraph 2: “The Law Society notes that this bill is intimately connected with the Government Communications Security Bureau and Related Legislation Amendment Bill”—for that member’s benefit—“and the justification (or otherwise) of its intrusive objectives. The Law Society has expressed its concerns’’—and let me read one or two of those concerns from the GCSB submission by the Law Society. “The Bill changes the Government Communications Security Bureau (GCSB) from being a foreign intelligence agency to a mixed foreign and domestic intelligence agency. The bill empowers the GCSB to spy on New Zealand citizens and residents, and to provide intelligence product to other government agencies in respect of those persons, in a way not previously contemplated and that is inconsistent with the rights to freedom of expression and freedom from unreasonable search and seizure under the New Zealand Bill of Rights Act 1990 (NZBORA) and with privacy interests recognised by New Zealand law.”

The Law Society goes on to express its concerns about the urgency process, the undue haste of this Government to get this legislation through without the checks and balances that New Zealand society—indeed, most Western countries—expect of their Governments. This is a terrible process. It is a terrible piece of law, and that is coming from a body that is moderate, whose criticism aims to be fair and independent. That is coming from the Law Society, which pithily and clearly explains why the GCSB bill and its accompanying Telecommunications (Interception Capability and Security) Bill are appalling for New Zealand.

The telecommunications bill imposes, on the telecommunications network operators, obligations to assist the Government on network security matters where they may raise a risk to New Zealand’s national security or economic well-being. That is what it says in the bill, and those aspects of the bill have not been defined. That is another reason why this legislation is sloppy. It is not defined what is in the national interest nor what is, in terms of New Zealand’s economic well-being, within the scope of spying activities and what falls outside them. This sloppy legislation does not define that. There is no oversight mechanism that sufficiently captures whether we should be doing these things or not. And then it goes on to give to Ministers—the Minister of Police, the Minister responsible for the SIS, the Minister responsible for the GCSB—Draconian powers to use these provisions, and we know these people do not themselves always get things perfect.

Certainly, the history to this legislation, the background, the context, was the Minister responsible for the GCSB coming under sharp criticism for spying on Kim Dotcom. That was against the murk of the appointment of Ian Fletcher, when the Prime Minister could not remember the fellow, and then he kind of could remember the fellow, and then, oh well, it turned out he was the brother of one of his friends. Then, oh, he may have actually called him to tell him to apply for the position. He had a major brain fade—what is becoming known as “a touch of the Banksies”, I think, in this House—on these issues. John Key then went on to be questioned on the Kitteridge report. He went on to be questioned on those illegal cases of spying; the Dotcom case was not the only one. And the GCSB bill and the telecommunications bill that followed, which we are debating today, went on to try to make legal those kinds of illegal spying on New Zealand citizens. That is outrageous—without any kind of checks and balances that would provide New Zealanders with the confidence that the spy agencies are acting in their interest and not in overseas’ interests.

This Government is distracted by spying on people in their homes. It should be focused on bigger issues. It should be focused on employment; on jobs; on policies like NZ Power, which will make power affordable for New Zealand homes; on KiwiBuild, which will build houses for New Zealanders; on Kiwi insurance to make sure that people can get insurance for their houses; and on the other reforms that Labour is proposing to—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! [Interruption] The member’s time has expired. [Interruption] Order! I am calling Steffan Browning.

STEFFAN BROWNING (Green): Kia ora, Mr Assistant Speaker. Today the Government is ticking through what we are calling the “TICS” bill, the Telecommunications (Interception Capability and Security) Bill. It is ticking it through this Parliament to ensure the spying agencies’ technical ability to access right into all of our communications—all the communications networks. Of course, this bill is the partner to the Government Communications Security Bureau (GCSB) legislation, which was passed into law in August. These bills collectively are arrogant, unjustified, and fundamentally an extension of the State to intrude into the privacy and the private lives of ordinary New Zealanders. This bill is a National Government bill and I heard just before a rather P-focused and, I will call it, a Sabin-rattler, pretending that this bill has nothing to do with getting into New Zealanders’ privacy and that it has nothing to do with the USA’s National Security Agency’s illegal and very vast spying throughout the total globe, our world that we know at this point. Day after day there are new revelations.

I will just go back a little. Australia recently had a lot of heat put on to it over its spying role in some of the earlier forms of spying that the National Security Agency was up to. One was called the ThinThread. What we found was that it was actually tested in New Zealand. What do New Zealanders think of that—their privacy being invaded in order for the National Security Agency of the USA to test in New Zealand its devices for doing vast spying? Well, the agency did that. It ran it for a bit, then that was dropped, and it went to yet another system that was tried internationally as well. What we had more recently were the revelations by Edward Snowden about the PRISM system. The PRISM system allows absolutely everything to be gathered—in the way that the National Security Agency, through agencies like the GCSB, through installations such as the Waihopai spy base out in Marlborough, just across the Cook Strait there, allows that and all that information that they can collect to be gathered.

I hear various murmurings from the front bench of the Government about this. [Interruption] Yes, actually, you are dead right, Mr Joyce. This system does allow all of that and there is absolutely no doubt anymore that the Waihopai spy base is being used as part of that total international communications grab. There is no way in hang that we should be putting through a bill, this “TICS” bill, that enables that to happen all the more easily. It is actually time to tear Waihopai down. Waihopai has had its time. We said that—groups such as the Anti-Bases Campaign. The Hollow Men was pointed out earlier on as a book, but you realise that Nicky Hager, the author of that book, also did some fantastic investigative journalism that pointed out what Waihopai was doing. All we have got recently, of course, is more confirmation of that. It is time for Waihopai to be torn down.

Although this bill ostensibly says that we will just set up the structures so that the spying that is allowed by the Government Communications Security Bureau Act, which has got warrants and whatever else all around it, can happen, this bill does more than that. It ensures that there is absolutely no network that the spy agencies want to get at that will not be accessible. One thing that has come out in the news revelations recently as well with regard to organisations such as Google, Yahoo!, and others is that the cables going throughout the world under the oceans are all able to be accessed, whether or not the organisations that operate them know. So the Green Party will be opposing this bill. We are looking for the days when we have a full, independent investigation and that we close Waihopai down.

JAMI-LEE ROSS (National—Botany): I commend the Telecommunications (Interception Capability and Security) Bill to the House.

A party vote was called for on the question, That the Telecommunications (Interception Capability and Security) Bill be now read a third time.

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 59

New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1; Independent: Horan.

Bill read a third time.

The result corrected after originally being announced as Ayes 61, Noes 57.

Bills

New Zealand International Convention Centre Bill

Second Reading

Hon STEVEN JOYCE (Minister for Economic Development): I move, That the New Zealand International Convention Centre Bill be now read a second time. I would like to thank the members of the Commerce Committee for their work in considering this bill, the work by officials, and those who submitted on the bill. This is a bill that will provide jobs and growth for New Zealanders. Once again, the Government lines up in this House in support of jobs and growth, and the Opposition lines up against jobs and growth, although, actually, because it is a personal vote, Labour members opposite today have the chance to demonstrate whether they are actually in favour of jobs for Kiwis or whether they cry only crocodile tears, washed away, of course, occasionally, in some cases, by the hospitality of a certain Skycity.

I also think the Labour Party has some wriggle room because I think it was in favour of this in 2011, before it was against it under the previous leader. And then the current leader was going around Auckland saying that he was sort of in favour of it but not publicly, and then I think he went on in the weekend and said that he would not rip up the contract throughout the term of Skycity’s gaming licence. I think that does give members opposite a certain amount of latitude, at least seven or eight positions that they could adopt, in voting for this bill.

The construction of the New Zealand International Convention Centre is vital for this country. There will be 1,000 people employed in the construction process. There will be 800 people servicing the needs of delegates and exhibitors when this centre is fully established. These are real jobs that provide real incomes for New Zealanders and support their families. This bill will help generate economic growth for all New Zealanders. The convention centre will inject an estimated $90 million in initial spending by delegates in Auckland and elsewhere in this country. There is expected to be a $49 million jump in GDP as a result. This bill will enhance New Zealand’s international reputation. It will enable the construction of an international-standard convention centre seating up to 3,500 delegates, which is something we have never had in New Zealand before and something that has been repeatedly called for over the last 20 years. It will be a new $400 million asset that will consolidate Auckland’s standing as an international metropolitan city and a destination of significance. All of these things will be achieved with very little, if any, direct investment by New Zealand taxpayers, and that is the beauty of this legislation and agreement.

Some of the claims made about this agreement and this bill over the last few months have been ridiculous. Let me just address a few of them. First, there is the claim that the deal is unfair to the Crown. The agreement between Skycity and the Crown was described by the independent assessment of KordaMentha as a fair deal for both parties, and market analysts and investors have clearly agreed with that assessment, as Skycity’s share price was not given a significant boost when the agreement was announced.

Hon Trevor Mallard: Based on Skycity information—it’s not independent.

Hon STEVEN JOYCE: Mr Mallard obviously wants to besmirch independence; that is fine. Then there was the criticism of the compensation provisions in the agreement. Let us be clear: the provisions in the agreement reflect standard commercial practice, which is that if either party—not just the Crown—breaches the agreement, then the regime will operate to restore the parties to the position they would have been in but for the breach of that agreement. If Skycity breaches certain agreed operating standards, it will be required to pay the Crown money for non-compliance. If Skycity does not deliver on its end of the agreement, it is required to pay back to the Crown the value of the regulatory concessions granted to that point.

There has also been some excitable commentary that the agreement breaches the principle of equality before the law, except that many pieces of legislation confer benefits on a particular party or activity. Look, for example, at the Rugby World Cup empowering legislation, or the legislation that established Fonterra. Nor is there anything special in the fact that the legislation gives effect to an agreement. Parliament has considered Treaty settlement bills for nearly 20 years now that do exactly as this bill does—give effect to an agreement. Some have even claimed that the agreement breaches parliamentary sovereignty or the Bill of Rights of 1688, yet the Government contracts past the expiry of Parliament all the time. Indeed, the Government could not function if contracts did not extend past the ending of particular parliaments. It enters into long-term agreements on construction projects like roads and rail, and on a whole range of Government services like IT and banking.

I do want to spend a bit of time on one area of criticism, which is about problem gambling, and that is where some of the more ill-informed criticism has been directed. The first point to make is that there is no certainty at all that this bill would increase the prevalence and harm created by problem gambling. The impact on the incidence of problem gambling by increasing gambling opportunities within an existing gambling venue is by no means clear, as Professor Max Abbott of the Auckland University of Technology stated in his oral submission to the select committee—although probably he is part of the conspiracy, as well. The Department of Internal Affairs acknowledges that figures around problem gambling are very difficult to quantify, and putting a cost on it is extremely difficult.

Secondly, it is very important to note that the agreement requires Skycity to implement a range of enhanced harm minimisation measures before any of the new pokies or other concessions are able to be used. They include a predictive modelling tool that analyses data to better identify players at risk of problem gambling. The Greens claimed in their minority report that Skycity already uses this. This is false. Thanks to this agreement, Skycity will be one of only two places in the world where this software is used. There will be a voluntary pre-commitment system, where players can elect to restrict the amount of time they play or the amount they spend; a doubling in the number of host responsibility specialists, to deliver 24-hour, 7-days-a-week coverage; and the introduction of player identification requirements when amounts of over $500 are being put on to or cashed from ticket-in, ticket-out tickets in non-restricted areas. Some submitters felt that the harm minimisation provisions are an important aspect of the agreement and that they should receive specific statutory recognition. The Commerce Committee agreed, and this recognition is now provided for in the purpose and outline sections of the bill. I support that amendment.

Third, these extra harm minimisation requirements will become part of Skycity’s host responsibility programme, which is monitored constantly by experienced and professional Department of Internal Affairs inspectors. The Gambling Commission is also required to review this every 2 years, and it involves independent experts in those reviews. This method of review is entirely up to the commission, which acts independently. In August of this year the Gambling Commission published its review of Skycity’s Auckland casino programme. Its assessment included extensive consultation with the Salvation Army, the Ministry of Health, the Department of Internal Affairs, and Lifeline Aotearoa. The report concluded that New Zealand’s regulatory environment is rigorous in the extent to which it emphasises responsible gambling principles, and that the casino’s current host responsibility programme is of a high standard internationally.

Fourth, it is worth noting that in the future, if the Gambling Commission decides to revoke or amend Skycity’s host responsibility programme, or if it requires the Auckland casino to have more or tougher harm minimisation measures, then Skycity must comply. None of the other obligations in the agreement, including the compensation obligations, will apply in that situation. Fifth, and finally, overall the number of pokie machines in New Zealand is falling by around 500 a year. This agreement would slow that reduction by around 6 months. Under the previous Government, pokie machines actually increased by an average of 700 machines per year—and the Opposition claims to be concerned about them! Many things in life have risks attached to them. If you did not want any risk, you would never get out of bed. The Government has done a good job of minimising the harm from this agreement while maximising the economic benefits to New Zealand.

In closing, let me summarise what this bill means for New Zealand. For little if any investment by taxpayers, New Zealanders will reap the benefits of a $400 million international-standard convention centre. The 230 new pokie machines is the same number granted to Skycity under the previous Government in 2001 for the development of the existing, and much smaller, Auckland convention centre. Helen Clark was happy to champion that at the time, and there was not a single squeak out of the Green Party. There was no cardboard out on the forecourt of Parliament. There was nothing. The Greens were quiet.

This is a bill about jobs and growth. Parties in favour of those things will vote in favour of the bill today. Parties that cry crocodile tears but do not actually support anything to create jobs and growth will once again vote against it. I commend this bill to the House.

Debate interrupted.

Voting

Correction—Telecommunications (Interception Capability and Security) Bill

Hon RUTH DYSON (Labour—Port Hills): I seek leave to correct a vote cast on the Telecommunications (Interception Capability and Security) Bill.

Mr DEPUTY SPEAKER: Leave is sought. What is the correction?

Hon RUTH DYSON: I wish to correct the vote to change it to 33 in opposition.

Mr DEPUTY SPEAKER: From?

Hon RUTH DYSON: From 31.

The ASSISTANT SPEAKER (Lindsay Tisch): From 31 to 33 in opposition. Leave is sought for that purpose. Is there any objection? There is no objection.

Bills

New Zealand International Convention Centre Bill

Second Reading

Debate resumed.

Hon TREVOR MALLARD (Labour—Hutt South): I think that there are some things that need to be placed clearly on the record. The first is that Labour, in Government, will regulate to prevent gambling harm. Second, we will not compensate for the regulatory functions of Government. If the convention centre is half-built, no one is going to go around and rip up the foundations, but this deal is gold-plated and we will not be bound by it. We will be supporting the Green Party’s amendments to the New Zealand International Convention Centre Bill. Gambling harm is an issue right across society and it affects many household budgets. I want to put a few things on the record from the select committee process.

First of all, the Labour Party members of the Commerce Committee asked that Treasury, the Department of Internal Affairs, and Ministry of Health officials advise the committee so that all members could be better informed. Government members, led by Jonathan Young, blocked that advice from going directly to the committee. What that meant was that we did not get the level and the quality of advice that a committee should receive. Instead—and I want to say that the officials whom I am now going to criticise worked for me, at least the lead one did, and he is a wonderful chap—at the committee the advice we were getting was from people who had themselves been involved in the negotiations. These people felt, I think, owned by the negotiations and had a sense of ownership over the deal. As a result of that, the advice that the select committee got from the Ministry of Business, Innovation and Employment was defensive and not informative. I regret that, because if the Government had nothing to hide, it would have allowed full, free, and frank advice from the full gambit of officials, rather than channelling it through people who had a personal, as well as a departmental, commitment to this legislation.

We are further concerned about the warning given to organisations providing health services—people on contract to the Ministry of Health who work with gambling addicts—that the people who did that very work were not allowed to come to the committee to give evidence. That was wrong, and I would like to thank the Salvation Army for having the bravery to come to the committee and to make it clear, on behalf of itself and the other organisations, that those were the instructions it was under from this Government. It comes so close to being a breach of privilege—but it is probably not—but the thing that I do know is that it is morally wrong to stop the people who know the most about gambling harm from giving evidence, giving their testimonies to the committee so that we could understand better.

Notwithstanding that, there was some advice that we received, directly and indirectly, that really summed up the situation. The Deputy Auditor-General said “we do not consider that the evaluation process was transparent or even-handed.” I am going to repeat that: “we do not consider that the evaluation process was transparent or even-handed.” This deal went to Skycity on a rort arranged at a dinner by the Prime Minister. He is transferring a massive amount of wealth to the private shareholders of Skycity from the people who are addicted to gaming machines in order to have something that he can turn the sod on next year, in election year. I want to agree with Treasury. I sometimes agree with Treasury more than my colleagues would like, but generally I do not. But on this one, Treasury hit the nail on the head. It expressed “strong concerns that private benefits to Sky City will exceed public benefits to New Zealanders”. That is the rort that I am talking about.

I say to Bill English: why does he not stand up for the things that he believes in? He knows that gambling is wrong at this level. He knows that this deal is a rort. He knows it in his heart and he knows it from the official advice that he has got. Why does he not take a principled stand? We all know there is a conscience vote on this issue. I am asking Bill English to look at the advice that he has received, to understand it, and to vote according to his conscience on this bill.

There is a growing consensus that the Ministers undervalued the worth of the additional pokie machines and, more important, the value to Skycity of the 27-year, unchallengeable—other than by legislation—extension to its exclusive licence in Auckland. These are the people who are providing an extension to the monopoly that sits around casino gambling in Auckland. The Australian examples indicate that that sort of arrangement on its own is worth hundreds of millions of dollars. In Australia Skycity is prepared to pay it, but here it was hardly counted—hardly counted—in the Government’s evaluation of the worth of this deal. We also note that the report that was prised out of the Minister who preceded me in this debate, the Minister for Economic Development, indicated that because of the diversion of investment there will be only a net 18 jobs created.

Metiria Turei: 1-8.

Hon TREVOR MALLARD: One-eight. He said thousands. It might be that thousands of people are involved in the building of it, but net 18 jobs is the advice that he asked for and that he got and tried to hide. That is just typical of the arrangements around this legislation: blow it up as wonderful in public, and if there is any advice that does not support John Key’s view—the sacrifice of the gamblers to his sod-turning—then let us keep it hidden away. If any advice does not agree with John Key, then let us keep it hidden away. We are going to see many more examples of this.

There is no doubt, notwithstanding what the Minister for Economic Development said, that these tables are the most used and are the worst form of gambling. The machines are used much more heavily—eight times to 10 times as much—than other machines are used around the country. Therefore, any one of these machines is much worse than those that are being taken out under the sinking-lid policy that has been praised so much by members opposite. This bill will result in more of the most harmful gambling. It will result in families losing significant assets, including their houses. It will result in family breakdowns. It will result in suicides. It will result in murder. We have seen the evidence of all of that already around the activities of Skycity. We have seen that on a repeated basis, and what we have opposite is a Government where not one of them will use their conscience. Peseta Sam Lotu-Iiga, I challenge you to use your conscience. Jonathan Young, who used to be a person of principle, used to preach anti-gambling, and what do we have here? We have someone who is promoting more gambling. I say to Jonathan Young, use your conscience. Stand up for what you used to believe in, and stop being a toady to the Prime Minister in an approach to try to get a Cabinet position, which we all know he will never get.

JONATHAN YOUNG (National—New Plymouth): Can I please start by just addressing an issue that Mr Mallard raised regarding the hearings in Auckland, where a member from the Salvation Army made a comment. I was concerned about that comment, so I investigated it. After the statement was made—and the statement was that members of the organisation were muzzled from appearing before the Commerce Committee—officials sought to clarify and understand the statement made to the committee. At that point, the Salvation Army made it clear that the Ministry of Health had not instructed the Salvation Army against making a submission to the select committee in respect of the New Zealand International Convention Centre Bill.

The comments made to the select committee related to an interpretation of the political neutrality clause, which is standard in health sector service contracts. That clause is about the relevant non-government organisation delivering its services in a manner that maintains the neutrality of central government agencies, which is a requirement of the State Services Commission. The meaning of that clause was clarified for the Salvation Army during the conversation with officials. The Salvation Army says it now understands that the clause means that it is entitled to make submissions and voice its opinion, but it cannot endeavour to influence the thinking or decision making of other individuals, organisations, or agencies. The member knows that that is a consistent regulation and guidance in terms of the State Services Commission.

This bill is about creating economic growth, particularly in tourism and construction, and seeing the spin-offs around the country of significantly more numbers of convention centre participants coming to New Zealand. The size of the international business events market is growing. The International Congress and Convention Association estimates that there were approximately 10,070 non-government international association conferences organised in the world in 2001, but only 44 of these were held in New Zealand. This is due in part to New Zealand not having the right facilities to attract larger conferences.

Addressing the harm issues around gambling, which the Minister for Economic Development, Steven Joyce, raised, is very much part of this bill. Increasing Skycity’s obligations to do so is embedded in this legislation. But also central to this legislation is addressing the issue around job creation. Let us not minimise that. The people whom I have had contact with—and I am sure members of this House have all had contact with—who struggle with long-term unemployment also suffer from depression, loss of confidence, some poor health, and very poor social outcomes. In the research that I did, I noticed that a number of academics at universities—Massey University and Auckland University—state, and I quote from an article in Policy Quarterly November 2010 entitled “Health, Employment, and Recession”, that increasing unemployment is associated with a wide range of adverse social outcomes, particularly when prolonged. The writer said: “Unemployment also has significant acute impacts on health, particularly poorer mental health status. Unemployment is a major contributor to reduced incomes and is itself related to significant adverse social and health outcomes.” This bill is principally about encouraging economic growth and increasing employment.

But, of course, we acknowledge that for some in our community, gambling-related harm is a terrible thing. It is something that we can and should do something about. This bill, leveraging off the agreement between Skycity and the Government, lifts the bar on harm minimisation obligations. I believe that we can see development and positive change in addressing this issue. Professor Delfabbro, who is an associate professor at the University of Adelaide, reported to the Gambling Commission that the New Zealand regulatory environment is rigorous, as the Minister said. Professor Delfabbro continued to say that the Auckland casino’s current host responsibility programme is of a high standard internationally.

One of the measures that Skycity is obligated to put in place is a predictive model created by Focal Research Consultants, which analyses loyalty data as a tool to identify players who are at risk from gambling harm. The Australian regulations stipulate that casinos do something only about those who are harmed, whereas here in New Zealand we have to put in place tools and technologies to identify players who are at risk, which is why New Zealand is seen as a world leader in harm minimisation. As these technologies and tools are developed, there is every opportunity that these can be extended right throughout the country. It is our understanding that Skycity’s development of this tool is an international first. This is about building those measures and putting contingencies in place.

The regulatory concessions in no way remove Skycity from the continuous review of its host responsibility programme, as the Green minority view in the commentary of this bill stated. Skycity does not escape the issues around public health scrutiny. The Gambling Act 2003 requires casino operators to implement a range of measures to prevent harm from casino gambling. As we know, every 2 years that is reviewed. The Gambling Commission considered whether there is a need for an additional independent evaluation of the effectiveness of the Auckland casino’s host responsibility programme. A number of submitters raised this as an issue. The commission felt no such need, as it undertakes such an evaluation in the course of its periodic reviews of casino host responsibility programmes. It does so by consulting with a range of knowledgable parties, as well as seeking independent expert assistance. The committee was also informed that the Department of Internal Affairs inspectors continue to walk through the casino on a very regular basis.

As I have said, what this bill does is create a significant economic opportunity for tourism, hospitality, retailing, construction, and convention centre activities that will create employment opportunities for New Zealand. It also places on Skycity a very serious obligation to develop and put in place measures that will identify people who are at risk from gambling harm. So this bill will maximise the positive opportunities of economic growth and employment, while also proactively developing technologies and practices that will identify potential gambling-related harm and work to reduce that. I commend this bill to the House.

Hon CLAYTON COSGROVE (Labour): The one thing that is lost on the Government as we debate the New Zealand International Convention Centre Bill is that there is a process that should have been gone through to come to an appropriate outcome. It may be that some of the things the Government says are true. There may be a case for a convention centre. There may be a case. There may well be a case for economic opportunity based around a convention centre in Auckland. There may well be a case for involvement by a whole lot of commercial entities. But the problem is that we will never know, because, as we know, no appropriate economic evaluation was done because there was only one bidder. Actually, when you look at Skycity, it is a private sector entity. Its job is to get the best deal it can for its shareholders in any commercial negotiation. I do not hold that against Skycity. It is its job as a private sector commercial organisation. But you would hope that the job of the Government, in negotiating a deal with the private sector, would be to, firstly, do it appropriately; secondly, do it ethically; and, thirdly, do it with a bit of gumption.

We know that when it comes to actually negotiating deals, whether it be with Rio Tinto—where Bill English told us that the $30 million was a free gift in order to secure the jobs down south, and then we found out that there is no jobs guarantee, and then, bizarrely, we found out that he did not even have the brains to ask for a jobs guarantee—or Meridian Energy or Mighty River Power, botch-up after botch-up—

Hon Shane Jones: Chorus.

Hon CLAYTON COSGROVE: —or Chorus—those guys over there could not negotiate their way out of a paper bag. Skycity must be sitting up there in Auckland going “Ha, ha, ha! Didn’t we do well?”.

Hon Shane Jones: Inept.

Hon CLAYTON COSGROVE: As my colleague said, the Government is inept to the point of negligence. Maurice Williamson grins away. He knows that it is true. He has negotiated the odd deal in his time. Maybe the Government should have put Maurice in charge of this. He might have done a better job. The job of Ministers and the Government is to be responsible, to look after the public purse, to get the best deal they can, and to protect our communities.

When you look at the process—my colleague Mr Mallard called Mr Young a toady. Well, there is a pattern.

Hon Trevor Mallard: No, no, no.

Hon CLAYTON COSGROVE: Was it not you?

Hon Trevor Mallard: No, I think he toadied up.

Hon CLAYTON COSGROVE: He toadied up. Well, there is a pattern when you look at the minority report that the Labour Party has put in and you look at the process that the Commerce Committee went through. The truth is that in the select committee, when Labour and, I think, Green colleagues asked repeatedly for the Ministry of Health to come in directly and make a submission to us so we could ask questions directly to specialists in the Ministry of Health—not the gatekeepers in the Ministry of Business, Innovation and Employment; the Ministry of Health—the Gambling Commission, and the Department of Internal Affairs, those entities and Government agencies charged with policing and dealing with the problems around gambling per se, they were blocked on every occasion by Jonathan Young and his band of merry men. They are all men. They were blocked on every occasion.

In fact, I can recall in the select committee that we wanted to send a letter to Steven Joyce and ask him for some particular commercial data that we believed he held. He is entitled as a Minister to say no. He was entitled to do that. Jonathan Young, the lion in Parliament and the lamb in the select committee, said no and blocked it on numbers. He would not even allow the committee to write to the Minister and just ask him for the information he had—not demand but ask—knowing, of course, that Steven Joyce could and would say no. That is the amount of intestinal fortitude and bravery—and he has got a ton of it—that that member exhibited on the committee.

Just like with Solid Energy when we asked for an inquiry, the toadies—and Trevor Mallard is right—for whatever reason, for their own political vanity and ambition, blocked every inquiry into that disaster. So those members cannot stand up here with any moral authority and say that as select committee members, just like their Ministers, they executed their duty and looked after those whom they purport to represent in the Government. And if I was Skycity, I would be looking at them and going “What a bunch of amateurs.”

In fact, it was so embarrassing, of course, during some of the public hearings, looking at Sam Lotu-Iiga. We now know, of course, that his electorate chairman rocked up, allegedly on behalf of the Catholic Church, unbeknownst to the Catholic Church, the pontiff, the archbishop, and a few others in the hierarchy of the Catholic Church, and said that this was a fantastic deal. Sam Lotu-Iiga never even asked him a question—for good reason, because he did not want to admit that he is a very close personal friend of that member. Did he breach any Standing Orders? No. Did he breach any ethics? Yes. Does he have any moral authority to stand on this issue? No. A number of those members, Jonathan Young and others, railed against the gambling industry for years, but when Steven Joyce comes acalling—

Hon Ruth Dyson: Flipped over.

Hon CLAYTON COSGROVE: —they just flip over, as my colleague said, and they are just marshalled into the corral like a bunch of sheep. I ask Jonathan Young—and he might want to ask his Minister—why, if he believes that this proposal stands on its own economic feet, on its own ethical feet, and all the data stacks up, he blocked the officials from the Ministry of Health from coming to the committee. No answer. Why did he block officials from the Department of Internal Affairs from coming to us?

Hon Ruth Dyson: Silence.

Hon CLAYTON COSGROVE: Silence. Why did he even refuse the committee sending a letter to the Minister to ask for some more information? If he was that worried—he could not even work out that the Minister does have the power to say: “No, it’s commercially sensitive, and I’m not going to give it to you.” Why did he and his merry men even block the committee from being allowed to send a letter?

Jonathan Young: Leaks.

Hon CLAYTON COSGROVE: Pardon? Sorry? Leaks—he said leaks. I presume he is not referring to the vegetable variety. So let us get this straight. The alibi for not sending a letter was the fact that if the committee sent a letter to ask for information of a Minister who could then refuse, the letter might be leaked. That is brilliant. That is genius. That is incredible. If that is the best that those members over on the other side can do to justify this, then there is a problem.

The truth is that this was a deal done that the Auditor-General criticised. This was a deal done and slipped through “Slick Willie” - like. The Prime Minister said “Just get it done. One tenderer—that will be all we need to do.” I think I said in the first reading that in a way you can understand that the Prime Minister came from the private sector frustrated, as we all are from time to time, with bureaucratic processes. In the private sector, when your chief executive officer says: “You’ve got the budget. Do it on time, do it properly, and, by the way, don’t bother me. Just get it done fast.”, that is appropriate because it is their money. When you come into Parliament, you do get aggrieved sometimes, when you are a Minister, at the slowness and at the bureaucratic processes that you have to go through. That is fair enough. But you have to go through them because the difference is that this is public money. This has public impact. All this is for the public’s benefit. It is taxpayer money. There has to be a higher and a different degree of accountability and transparency when you are spending other people’s dough as a Minister and as a Government on behalf of taxpayers.

So you can understand that frustration, but I say to the Prime Minister that he needs to temper his frustration because there is a proper process to go through. And his select committee members, his toadies and lackeys over there, did not represent their constituencies or their public well. I believe that they did not want to know what submitters said—certainly not if they were opposed to this deal. They did not want any evidence, any Government agency, or any specialist on behalf of the Crown to even come, raise issues, and question any facet of the harm that could possibly be done, or even talk in general terms—take Skycity out of it—about the harm that excessive gambling causes. They did not want it on the public record, and they think that that just papers over the cracks, they can get away with it, and it is all hidden. Well, the problem for Jonathan Young and the three at the back who are on the committee is that this is a Parliament. These people are exposed; the report exposes them. We have such a thing called freedom of speech, and we can now debate it here. So the short-sighted stupidity of Mr Young in trying to hide it all, paper over the cracks—he did not even have the gumption to realise that, hang on, we are going to whip back to the Chamber when the bill gets reported back, and it will all come out anyway.

Jonathan Young: Of course.

Hon CLAYTON COSGROVE: “Of course.”, he says. Well, that shows the ineptitude of that man over there. He could not even work that out.

We are opposed to the bill, we are opposed to the process that it went through, and we are opposed to the disrespect that was shown to not only submitters but those good folk in the Public Service, those specialists who could have provided great background and facts as to the impact, the negative impact, of this bill.

METIRIA TUREI (Co-Leader—Green): Outside this Chamber, on the lawns of Parliament today, you will see a life-size replica of the 230 pokie machines, 240 automated gaming places, and 40 gaming tables that John Key is giving to Skycity in exchange for a building. There is no better representation of the scale of this deal than the cardboard casino that is constructed outside. It is a casino equivalent in size to the third-largest casino in this country. I urged all members earlier today to go out and have a look at the cardboard casino before they voted on this deal. In fact, there is still some time—it will be up for a few more minutes yet. So if you have not had a look, I urge you to do so, because it is really important to the families who will suffer from the effects of problem gambling that you know what you are voting for today if you support the New Zealand International Convention Centre Bill. If it leads one or two of you to change your minds, all the better. But at least know what it is that you are doing, as a third—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

METIRIA TUREI: Thank you, Mr Assistant Speaker. I was on the Commerce Committee, which heard the submissions on this bill, and we heard and read very tragic stories of gambling harm that has been caused in the past and that is feared for the future. A high school teacher in Manurewa told MPs that he came from a family of gamblers. He did not gamble himself, but his younger brother did. After several years of working and saving in the UK, this man’s brother returned to New Zealand with a deposit to look for a home to buy. His fiancée was arriving soon after to join him. By the time his fiancée arrived in New Zealand, the deposit was gone. It had been squandered entirely on gambling. This man’s brother became suicidal because he knew that he stood to lose his fiancée and his life as a result of the gambling harm that he was suffering. Fortunately for him, he had a fiancée who did love him, and who loved him enough to support his recovery. She got him the professional help that he needed for his gambling addiction. His siblings supported both of them in this recovery process. This submitter’s brother got the help that he needed and was able to maintain and recover his relationship and his life, and he no longer gambles.

But not everybody will be so lucky. The Asian Family Services branch of the Problem Gambling Foundation came to the Commerce Committee and described the cases that it sees: suicide, loan sharking, family violence, and divorce—all the result of problem gambling. The painful experience of clients who are affected by problem gambling from Skycity Casino gambling cannot be measured simply in financial terms. Asian Family Services is adamant that this deal will lead to harm in their community. Only those who have been affected know how painful the experience is and understand that any deal is not a good deal if it creates more pain in our community and for our families. Many Asian Family Services clients worry that this deal will cause more new migrants to lose their savings when they arrive in New Zealand. This means the loss of their dream of a new and better life in this country, and the loss of their contribution to our community.

Bob McCroskie from Family First, whom we do not always agree with, related a terrible story of a father and recently widowed husband who lost everything to problem gambling at the casino. We heard of the desperation of this man’s family who tried to help, but who were thwarted by Skycity. They saw no evidence of Skycity managing their father’s self-ban. He had a Skycity gold card, and all the family saw was enticement after enticement by Skycity for this man to come back, to spend more, to gamble more, and to lose even more. So in the end, this loved family man was insolvent at the time of his death, owing $200,000 in stolen money to his employer and to his family. That is a terrible last memory of a life that was otherwise well lived.

Today the National Party, ACT, and United Future are all ready to vote to create more of these stories and to create more of this harm for families, affecting thousands of New Zealanders, as set out in the Minister for Economic Development’s own advice. Make no mistake, this is a moral issue. When this Parliament is deciding to support a building by increasing problem gambling, it shows just how far the Government is prepared to compromise on basic morals and decency. Some MPs who support this deal will no doubt listen to the stories of people affected by problem gambling and respond with platitudes of “So, personal responsibility.” My response to that is that it is precisely the job of the Government to make good law to protect public health and prevent harm. If those MPs cannot be bothered doing their job, then they should get out, because all they are doing is causing more harm for families who do not deserve it.

Today I asked the Minister for Economic Development, Steven Joyce, about the harm minimisation advice that he received, and the fact that much of it was withheld after his consultation with Skycity. We can only surmise that Skycity wants to keep secret this information about the extent of the harm caused by its casino and the increase in harm caused by this deal because it is commercially sensitive. That can mean only two things. First, it means that a significant proportion of the profits that the casino reaps is from problem gambling. Actually, we do know that. Around 40 percent of the profits of pokie machines come from problem gamblers. It is not new information, so why the secrecy? Second, it means that Skycity uses the information gathered for harm minimisation purposes to market to problem gamblers. We know of case after case where problem gamblers have been part of the Skycity loyalty programme. We know Skycity can track their spending, and it is supposed to track it so it can intervene if that person’s gambling becomes a problem. But, in fact, as families report, that information is not used to help a problem gambler; it is used to encourage the problem gambler, because the business model of the casino relies on people having a gambling problem and a gambling addiction.

This deal sells our gambling laws to Skycity for $400 million. So what is to stop other sales of our law? We have already seen the sale of our employment law to Warner Bros. What is to stop John Key and Steven Joyce selling our tobacco control law to Philip Morris in exchange for something? I do not know—a new motorway, perhaps? Then, at the end of the day, the Minister’s own advice shows that 6,500 children will be harmed in exchange for 18 new jobs—6,500 children will be harmed by this deal in exchange for 18 new jobs. At the end of the day, this bill is not about a convention centre. If the Government has the money to build a motorway, it has the money to build a convention centre. Frankly, it is irrelevant. Just as cigarettes are described as nicotine delivery devices, the convention centre is simply a casino delivery device for Skycity. This bill is a deal done over a couple of dinners between John Key and Skycity, where John Key has lent to Skycity the full capacity of the Government to overturn gambling laws that have hindered Skycity’s expansion plans. The convention centre is simply a convenient excuse to enable Skycity to expand, as it has wanted to do for a decade.

I urge MPs to visit the cardboard casino before it comes down this afternoon and to consider your consciences. Peseta Sam Lotu-Iiga, Jonathan Young, Peter Dunne, John Banks, Alfred Ngaro, Chester Borrows, Jian Yang, Kanwaljit Singh Bakshi: consider your consciences in deciding whether to support a bill that, by every measure and by all evidence, will cause harm to New Zealand families. Thank you.

KANWALJIT SINGH BAKSHI (National): Thank you for the opportunity to speak during the second reading of the New Zealand International Convention Centre Bill. Let there be absolutely no doubt in anyone’s mind that this legislation, like the many other bills introduced by the National Government, is aimed at the betterment of New Zealand and New Zealanders. By way of this legislation, we in the National Government seek to create jobs and investment.

Hon Trevor Mallard: Who wrote this rubbish? Drafted by Skycity—drafted by Skycity.

KANWALJIT SINGH BAKSHI: It was written by me, Mr Trevor Mallard. Please try to listen to it.

Hon Trevor Mallard: I doubt it.

KANWALJIT SINGH BAKSHI: Never mind, I will show you—I will show you. Furthermore, by way of introducing this legislation, the Government also seeks to build a new international profile for New Zealand in order to attract high-value tourists.

For a considerable period of time, the tourism sector and businesses have shared the need for a convention centre of an international standard and size to be built in New Zealand. Finally, this National Government decided to act on this much-needed facility. The Government signed an agreement with Skycity to build a world-class convention centre in Auckland, with the aim of creating jobs, boosting tourism, and bringing significant benefits to the entire country. Just to share some numbers with you, the benefit of this international-standard convention centre is expected to include $90 million injected into the economy annually, approximately 1,000 construction jobs, and 800 jobs once the centre is built and is operational. We expect that the convention centre will cater for 3,500 delegates at any given time and it is likely to attract around 33,000 delegates each year. I do not know where the Hon Trevor Mallard got the number of 18 full-time jobs from. I think you would need more than 18 people just to maintain that convention centre.

The Opposition says that the Government does not care about gambling issues that may arise out of the agreement. Well, to those members’ surprise, we have a clear understanding of the issues around gambling harm and what steps need to be taken to ensure the minimisation of this harm. Skycity, for its part, has already got one of the most rigorous host responsibility programmes. The Government, for its part, has placed stringent obligations on Skycity because all of us want to minimise the harm caused by gambling. Since we have taken over the Government benches, the number of pokies has been reduced considerably.

Some of these extra harm minimisation requirements will become part of Skycity’s host responsibility programme, which is monitored constantly by experienced and professional Department of Internal Affairs inspectors. The Gambling Commission is also required to review this every 2 years. It involves a wide range of independent experts in those reviews. The method of review is entirely up to the commission, which acts independently from the Government. Based on its obligations, Skycity will introduce a predictive modelling tool that continuously analyses data in order to identify problem gamblers. In addition, Skycity will introduce clear identification requirements when amounts over $500 are being put on to, or cashed out from, the non-restricted areas. Skycity has also agreed to double the number of host responsibility specialists in order to deliver coverage 24 hours a day, 7 days a week.

This agreement that the National Government has formed with Skycity is better for the economy, better for Auckland, and better for New Zealand. I commend this bill to the House.

TRACEY MARTIN (NZ First): Kia ora, Mr Assistant Speaker. With all respect to the member who just resumed his seat, Kanwaljit Singh Bakshi, the majority of that speech was rubbish. It was very interesting to hear the Minister for Economic Development, when he started his speech, having to actually compare this deal—in the New Zealand International Convention Centre Bill—with Treaty settlements and the Rugby World Cup. The Minister had to compare this deal with Treaty settlements to actually justify it to New Zealand. I think that shows how low down in the barrel the Minister and the Government have had to reach to try to justify this deal to the people of New Zealand.

This deal is nothing like a Treaty settlement. It is nothing like the Rugby World Cup, of which there was not just a single beneficiary; the whole country benefited. For the member who just resumed his seat to suggest that the whole country will benefit from a convention centre inside Auckland is nonsense. These buildings are built. The company, Skycity, runs them specifically to keep the customers it brings into its buildings inside its buildings. That is why it builds restaurants in them. That is why it builds shops in them. It will pick up these China Southern Airlines customers from the airport in its cars. It will transport them to its convention centre. It will keep them within its walls as much as it can. Auckland will see no improvement, apart from the fact that Skycity might have to pay a few more dollars out to charity to counteract the harm it is doing. So I am sorry, but your speech was rubbish.

I get back to the point where I actually wanted to start. We keep hearing—and we just heard it again—that New Zealanders will reap the benefits of a convention centre. New Zealanders will not own it. New Zealanders will not own it—it is a private building. Again, I just take up the point made by the Green member Metiria Turei where she mentioned that John Key had swapped 250 pokie machines and this many, this many, this many for a building. We do not get the building. If we were actually going to get the building, New Zealanders might say that they gained something. We do not. We have given away legislation so that a private company can improve its own profit line, and that is exactly what private companies do. [Interruption] No, no, I have no beef against Skycity. If you can get a deal like this, of course you would get it. The fact is that you should not be able to get a deal like this on the New Zealand people. This is not about a convention centre; this is about pokie machines.

The very fact that Len Brown and the rest of the councillors and local board members in Auckland put forward and approved a motion to have a sinking lid on pokie machines in the very city where this company may, because of that sinking lid, end up with a monopoly concerns me. I would like to know from Len Brown what changed his mind after he voted for a sinking lid across Auckland because he saw the harm of pokie machines on the rest of the communities, and why he now supports this convention centre idea and this Government. What happened? Let us hope that it was not some discussion about a tunnel under a harbour or some discussion about some electric trains out to the airport or any other discussions like that that made Len Brown change his philosophy around this particular deal.

The Government and the proponents of this deal like to point to data that suggests that more gamblers on pokie machines become problem gamblers in small, local pubs and RSAs than in the large, responsible organisations such as Skycity. This is a really interesting manipulation of the data. I want to point out a joint statement by Chris Tremain and Peter Dunne. It was put out in May of this year. The title of it is “Government sets $55.3m problem gambling strategy”. It says: “The problem gambling levy is expected to recover about $33.35 million from non-casino gambling machines, $11.34 million from casinos, $5.38 million from the NZ Racing Board and $3.95 million from the NZ Lotteries Commission.” It also says: “The levy is staying about the same because there’s been no significant change to problem gambling data.”

We are hearing that apparently there has been a change to problem gambling data, because the Government keeps patting itself on the back about apparently lowering it, but the levies need to stay the same because there has been no significant change. It continues: “The number of machines has decreased,”—righty-o—“expenditure overall is down and the most recent New Zealand health survey appeared to indicate a slight decline in prevalence.” This is from the Ministers: “The amount that each sector is required to pay depends on that sector’s share of total player expenditure across the four sectors, and that sector’s share of the help-seeking … associated with gambling in those four sectors … This means that non-casino gaming machine operators will continue to pay by far the highest share of the levy. Harm is associated with non-casino gaming machines more often than with any other form of gambling.”

By this point you might be asking why Tracey Martin is standing up and fighting against the small RSAs and the pubs and their gambling machines. It is because that is a really interesting twist on how this data was created. The number of problem gamblers in the country is predominantly created by those who seek help; those who are identified and then actually go to seek help from such an organisation. They are more readily identified inside the communities that know them. They are more readily identified inside the local RSAs. They are more readily identified inside the pubs. The publicans and the people in the RSAs walk up to those clients, whom they know, and say: “Mate, you’ve got a problem. How can we help you out?”. To actually penalise the RSAs and the pubs through situations like the levy, where they pay 1.31 cents in every dollar, whereas the casino pays only 0.74 cents in every dollar—one could say that the casinos do not identify the problem gamblers.

I love the fact that the Minister and also other members have said that the casino, as part of the deal, will be doubling its—what are they called? They are called something or other—responsible persons; that is right. So there will be extra staff. In June One News said: “As part of the pokies for convention centre deal, SkyCity only needs to employ three extra staff to help identify problem gambling. … In response to questions from ONE News, SkyCity has confirmed that it currently has three host responsibility executives, and that number will increase to six. Minister for Economic Development Steven Joyce said his understanding was that there would be ‘twenty-four seven’ coverage.” Figure out how many hours those people are working and figure out the floor space of that casino. Those people ought to be earning their wages. “This coverage is a requirement in the legally binding agreement unveiled by Joyce and SkyCity last month.” This is from June. It goes on: “ONE News asked SkyCity exactly how it would provide 24/7 coverage with just six people. However, SkyCity has refused to answer.” That is probably because it does not know how it is going to do it. This is a spin again. This is a spin. This is a deal done.

Let us talk about the fact that clause 3, at the beginning of the bill, says that “The overarching purpose of this Act is to provide economic benefits to New Zealanders by improving New Zealand’s capability to host …”, etc. I just went to the Government’s new Careers New Zealand website to have a look at how much the people who would be employed inside this casino might be paid. Right now, if you get a job inside a casino in New Zealand, you will get paid $15 an hour. This is not exactly the high-wage economy that John Key and this Government sold the electorate on when they went to the last election. The other jobs that are going to be inside this convention centre—housekeepers, kitchenhands, possibly waiters and waitresses, dishwashers—all get paid less per hour, as currently shown on the Careers New Zealand website. That is hardly what I want to go back and talk to the young people in my community about—for them to aspire to be dishwashers in a casino.

David Bennett: You don’t have a community.

TRACEY MARTIN: Everybody has a community. That is the problem, sir. You obviously do not belong to a community—you do not understand that point. It is said that this bill is about economic growth, but it is economic growth in the wrong direction. There is nothing in this bill for the people of New Zealand. The Government has sold our legislation yet again. New Zealand First will be opposing this bill.

MARK MITCHELL (National—Rodney): Firstly, I would just like to acknowledge my colleague and good friend Kanwaljit Bakshi, who is a very, very good member of the Commerce Committee. He has had some really positive input in the work that the select committee has been doing on this New Zealand International Convention Centre Bill. He is also very passionate about the community that he represents. I think it goes a long way to talk about the poor quality of the debate when you have a member of this House who gets up and accuses him of speaking rubbish.

I would like to say that I find it amazing that there are members of this Parliament who are getting up and saying that there are going to be no benefits to New Zealand at all of us being able to attract a further 33,000 tourists each year into our country and that there is going to be no positive spin-off. I would like to use a couple of quotes from Business New Zealand’s Chief Executive, Phil O’Reilly. He said: “For New Zealand to deliver on the goal of achieving more high value tourism, an international quality convention centre is essential.” I agree with him entirely.

I would just like to talk about my own electorate of Rodney. When we have 33,000 additional visitors coming into Auckland each year, they are not going to sit in a convention centre; they will want to get out and experience New Zealand. They will want to take in the Kiwi experience. Rodney has got wineries. We have got fantastic horse trekking outfits. We have got Snowplanet in Silverdale. We have the Pūhoi cheese factory and the historic Pūhoi Pub. We have the Waiwera hot pools. We have SheepWorld between Warkworth and Wellsford. We have got wonderful facilities at Gulf Harbour. We have got wonderful accommodation and lodges in Rodney to stay in.

Actually, if those 33,000 delegates arrive in New Zealand each year, I am very confident that they are going to be out spending and wanting to experience and putting more money into our local economy. So I am very, very happy to stand here to support this bill. I commend it to the House. Thank you.

Dr DAVID CLARK (Labour—Dunedin North): This New Zealand International Convention Centre Bill is a terrible bill. It is a shambles. The Government has put itself in a terrible negotiating position, and this is a bad deal for New Zealand taxpayers. That is what has come out of this shoddy—shoddy—negotiation that the Government has done. Many New Zealanders will think that having an international convention centre is a desirable thing, and, in fact, it is. Few would disagree with the proposition that having a high-quality international convention centre is a good idea. Nobody disputes that. What people are disputing here in this Parliament, quite rightly, is that paying for it by problem gambling is the answer. It is not the answer. Paying for a convention centre with problem gambling is a terrible idea. New Zealanders know that and this Government knows that. That is what this Government knows. Well might those members opposite hang their heads, as they are, because they should be ashamed of this legislation. I see that the members in the backbenches are ashamed. They know—those low down on the list—that this legislation may well be a reason that they are not coming back into this Parliament at the next election.

Steven Joyce’s own department, the Ministry of Business, Innovation and Employment, estimated that 8,000 New Zealanders would be affected by problem gambling, by the fallout from these changes—8,000 New Zealanders would be harmed. That is why Government members are getting noisy over there. They do not like the fact that officials, giving fair, free, and frank advice, have advised the Government that a huge amount of harm will come from this legislation.

The net benefit of it, according to the New Zealand Institute of Economic Research in its independent review, is just 18 jobs—18 jobs. This is the Government’s big idea—18 jobs for New Zealanders and 8,000 people harmed. It is atrocious—atrocious—legislation. The Government originally tried to sell this, believe it or not, as an economic development initiative. It is a mockery—it is a mockery. It makes a mockery of the term “economic development”. The benefits of the casino deal to New Zealand are marginal. The debate has shifted to problem gambling. That is rightly where it should be.

Why is the deal so bad? Well, the reason is that the Government put itself over a barrel in the negotiations. There was a lack of transparency in the process, with the Prime Minister favouring one party, having talks with one party—

Hon Ruth Dyson: Was there a tender process?

Dr DAVID CLARK: —and giving that party the inside word on how to put the bid through. Was there a tender process, my colleague asks. Well, there certainly was not a tender process, as we would understand it, to proceed normally in Government. There seemed to be one party that had the inside running on this from start to finish. A transparent process would have seen competitive bidders. Taxpayers would have had a much better deal if this Government was not doing a shoddy deal with its mates. That is what has gone wrong here. That is what is most obviously wrong.

Treasury has made it clear that it is not convinced by the cost-benefit analysis of this proposition. It says it has “strong concerns that private benefits to Skycity will exceed public benefits to New Zealanders.” That is pretty clear from Treasury. It is not mincing its words. It says that public gains are exceeded by private benefit. It says that “Public costs will only go to private gain,”. They are pretty strong words. “Treasury is concerned that the Crown currently lacks adequate leverage in the negotiations.”—that is from another part of its report. It said that the Government really was not up to the task of negotiating, and well it might say that. The business had all of the facts and figures. The Government case relied upon the information provided by Skycity. We needed an independent look at this, but we did not get it. There was no independent, transparent process for picking the winner from this tender. It was a shoddy deal done by a shoddy Government that is determined to do shoddy deal after shoddy deal after shoddy deal. This casino deal, I am afraid, is no different.

The deal by Skycity was an extra 230 pokie machines and an extension on its licence until 2048, in return for building the convention centre. Even if you put the horrors of problem gambling to one side, comparisons with overseas valuation of the gambling rights show that taxpayers have been short-changed. In Australia, just across the Ditch, the firms that run the pokie machines pay a huge amount for licence extensions. They pay a huge amount for monopoly rights to have gambling in the city, and that could apply here. We have an effective monopoly operating right now in Auckland on these machines.

Sudhir Kale, Professor of Marketing at Bond University and a friend of Skycity Chief Executive, Mr Morrison, and who has worked as a consultant at casinos on five continents, said that the deal was a clear win for Skycity. He said, and these are his words: “He’s a friend, but if you want to quote me you can say: ‘Morrison did an excellent job negotiating with authorities’.” The 27-year licence he calls the icing on the cake. He says the pokie machines will pay for the convention centre in 3 years. The licence extension is the icing on the cake. Skycity is a business. You can understand why Skycity has done things the way it has. It is laughing all the way to the bank, but it is the taxpayers, who are bearing the cost, and the problem gamblers, who will pay for this legislation, who are really worse off. Treasury was spot on when it said that the public costs would flow to private gain once the centre is paid off.

There may be worse to come—there may be worse to come. We know that the final negotiations on spending for the convention centre are set to happen next year. What else is happening next year? Well, we believe there is an election scheduled for next year. We believe there is an election scheduled. If it does not happen sooner—if this Government, with its shoddy deals, does not bring itself to fall over before then—there is an election scheduled, and Skycity will know that. In the agreement that the Government has signed there is a clause that allows it to shovel more money to Skycity if the convention centre looks likely to cost more than is currently projected. If there is a saving, Skycity gets to save it. It gets to keep the extra money. It gets to pocket it. But if it looks like the convention centre is going to cost more than it is currently projected to, the Government has left itself a clause to shovel more taxpayers’ money into it. It is basically an open cheque book. The negotiation will be a very one-sided one in election year, when this Government, embarrassed as it is at the lack of progress in many areas, tries to ram this legislation through so that it has a glossy convention centre to show for its work.

Well, that is not going to be good for New Zealanders. Currently, the centre is projected to cost $402 million, and we will see whether or not it exceeds its budget. But Skycity has form on exceeding its budgets. I remind the House of the TV programme Under the Grill. The restaurant, The Grill, cost $4 million. It was supposed to be open for the 2011 Rugby World Cup. That project ran 25 percent over budget and 25 percent over time. That was when the incentives were lined up for Skycity to finish it on time and to finish it under budget. But right now the incentives are lined up to finish it over time and over budget, at the taxpayers’ expense.

This is a terrible deal. Treasury has pointed it out and the Deputy Auditor-General has also pointed it out. This Government has not been a confident negotiator. The Deputy Auditor-General pulled no punches, describing the process for what it was: “we do not consider that the evaluation process was transparent or even-handed.” Those are the words of the Deputy Auditor-General. Treasury says it is bad value, and the Deputy Auditor-General says it is not transparent or even-handed. This is a shoddy Government doing shoddy deals, and it is at the expense of problem gamblers. It is at the expense of the New Zealand taxpayer.

Those members opposite who are hanging their heads do so quite rightly. This will cost the Government because New Zealanders know that this is a bad deal for everybody. It is a bad deal all round. It is shoddy. I ask those members opposite to examine their consciences when it comes time to vote on this conscience issue, and pull out now. Save your seats, do the right thing, and let us have a proper, transparent process around this deal. Let us get a convention centre that is paid for the right way, not paid for off the back of problem gamblers and not at the expense of decent, proper process. This is a bad deal. There will be 8,000 more New Zealanders harmed, according to the Government’s own figures, for just 18 more jobs. It is a shoddy, shonky deal from this Government.

Dr JIAN YANG (National): I would like to make a few comments about Tracey Martin’s speech. I was simply appalled when I heard that Tracey Martin was saying that private companies are not New Zealand companies. That really reflects Tracey Martin’s attitude. It was New Zealand companies—

Tracey Martin: What? Private companies are not New Zealand companies—when did I say that?

Dr JIAN YANG: You said that because it is a private company, it is not a New Zealand company. That is what you said.

We all know that New Zealand’s economy is recovering well from the global financial crisis. New Zealand is, and will continue to be, one of the fastest-growing economies amongst OECD countries. I am very proud of what the Government has been achieving. The Government has been working very hard to build a more competitive and productive economy. This has been one of National’s top priorities—one of its main priorities. The New Zealand International Convention Centre Bill will deliver more jobs and growth for New Zealanders.

Tourism is one of our most important pillars of our economy. The New Zealand International Convention Centre will further boost our tourism industry. I have no doubt about this, because I have talked to a number of professionals in this industry, and all of them share my views. As a matter of fact, for years the tourism industry and the business sector have been asking for an international convention centre to be built in New Zealand, to ensure that we can compete with Australia and Asia by tapping into the growing market of high-value business visitors. The New Zealand International Convention Centre is expected to attract about 33,000 more—

Scott Simpson: How many?

Dr JIAN YANG: —33,000 more conference delegates to New Zealand each year. Let me quote Tourism New Zealand’s Chief Executive, Kevin Bowler. He said: “International delegates deliver the highest average daily spend of all visitors, spending over $3,000 while holiday, Visiting Friends and Relatives (VFR) and business arrivals spend under $3,000.”

There are, indeed, people in our community who do have issues with gambling. However, it is worth noting that the Department of Internal Affairs acknowledges that the figures are very difficult to quantify, and putting a cost on it is “extremely difficult”. Under the agreement, Skycity will have to introduce a predictive modelling tool that analyses data to identify players at risk of problem gambling, as well as a voluntary pre-commitment system where players can elect to restrict the amount of time they play or the amount they spend. In August of this year the Gambling Commission published its review of Skycity’s Auckland casino programme. Its assessment included extensive consultation with the Salvation Army, the Ministry of Health, the Department of Internal Affairs, and Lifeline Aotearoa. The report concluded that New Zealand’s regulatory environment is rigorous in the extent to which it emphasises responsible gambling principles, and that the Auckland casino’s current Host Responsibility programme is of a high standard internationally.

The New Zealand International Convention Centre is just one of the Government’s around 330 initiatives in the Business Growth Agenda to grow jobs for all Kiwis. I commend the bill to the House. Thank you.

Sitting suspended from 6 p.m. to 7.30 p.m.

Hon RUTH DYSON (Labour—Port Hills): Thank you very much for the opportunity to speak on the New Zealand International Convention Centre Bill. Normally when I take a call I say that it gives me pleasure, because it does. It is a privilege to be in this Parliament. But this is one of the saddest bills that I have seen debated. It is made even sadder, actually, because my understanding is that at the end of this debate we will be having a personal vote. That is pretty rare in this Parliament and I think that it will be pretty challenging for some members of this House to vote in support of this bill when, in their own conscience and their own heart, they know that it is wrong. I would really urge them to reflect on the fact that it is not just your constituents whom you need to go back to and front up to. It is not just your party hierarchy that you need to go back to, front up to, and explain your actions to. Actually, in the end, it is your own conscience. It is your own reflection in the mirror that you see in the morning that you have to justify your actions to, and this legislation and the shonky deal that it turns into law cannot have any moral justification. It is an outrage.

If there is a good debate to be had in this Parliament—and, by crikey, I hope there are lots of them; I have been party to many of them and I hope there will be many, many more—and if there is a contentious issue, then it is my view that it is the responsibility of the select committee and, indeed, the Minister to make sure that all the information about that issue is presented. You know, so what if some people do not like it? That is not the point. It is so that you can have a well-informed debate based on the facts. Well, that is what the Commerce Committee looking at this bill sought to do. The advisers on this legislation are from the Ministry of Business, Innovation and Employment. They are quite literally the same people who have been negotiating with the Skycity people over this deal. How could they possibly give robust advice to the select committee? It felt as if they were compromised and they certainly acted as if they were compromised in some of their advice.

So the select committee members—well, the Labour and Green members, anyway, but not the other members—quite properly said that we needed a broader range of advice. We wanted advice from Treasury about the financial implications of this deal. We wanted advice from the people from the Department of Internal Affairs. They are the people who run the gambling regulatory regime in New Zealand. They should know what is going on in this space. And we wanted advice from the Ministry of Health because, after all, the gambling problem is a public health issue. So that is what the select committee said. I think that it should be commended. That was good thinking. That is looking at the breadth of issues that are implicated and are impacted on by this legislation.

What did the National Party members do to that proposal? Did they say: “What a good idea. We want well-founded, well-informed, robust debate.”? No, they did not. They said: “No. We are blocking any attempt to have that breadth of advice to the select committee.” I think that is a disgrace. Hiding information and hiding advice from a select committee is something that should not be tolerated by this Parliament. Of all the members of Parliament who chair select committees or have positions of responsibility, Jonathan Young did that and I am stunned. I am not wont to praise National members of Parliament; I think it is damaging to both their and my reputation. But, actually, I think quite highly of Jonathan Young and this is a huge disappointment. It is a major detriment to the quality of the debate that we are able to have. What we ended up with was a select committee that just had so-called Public Service independent advice from the very department officials who had negotiated the deal with the Skycity people in the first place. That is the first issue I want to raise in regard to a shonky process leading to a shonky outcome.

The second point I want to make is one that both Jonathan Young and Trevor Mallard have commented on. I was alerted to this by Jonathan Young after I mentioned it at an earlier stage of this debate. I feel tricked by his advice because it is about the people who worked for organisations that had contracts with the Ministry of Health. They could not make a submission on this legislation solely because of their contracts as public health supporters and advisers or as those who offer treatment to people who have a gambling addiction. Those people were not allowed to make a submission. Jonathan Young corrected me when I said that before. He said: “That’s not true. We did have those organisations represented.” What we did not have—

Mr DEPUTY SPEAKER: Order! The member’s time has expired. [Interruption] Order! The member’s time has expired.

DENISE ROCHE (Green): I will be taking this short call for the Greens on the New Zealand International Convention Centre Bill as it comes back for its second reading in the House after it has been to the Commerce Committee. The Government says that this deal is about economic growth, but this deal relies on bad negotiation. It relies on favouritism, it relies on crony capitalism, and it ignores officials’ advice on how many jobs will be created as a result of this deal. The officials’ advice says there will be 18 jobs created as a result of this deal. If that is economic growth, then we must be very worried indeed, because those 18 jobs come and that economic growth—and it is not a lot—comes at the cost of 230 pokie machines, 12 automated gaming tables with 20 seats at each table, and 40 gambling tables as well. Basically, that adds an entire casino to New Zealand’s current list of casinos. In fact, it would be the third-largest casino in New Zealand and we add that on top of what is already there in Auckland. We do that in exchange for 18 jobs.

The casino is obviously a very good negotiator and also gets a 27-year extension on its licence. In Australia, we are a laughing stock. We are a laughing stock because we are hopeless negotiators. The sweet deal that was stitched up over dinner between Government Ministers, the Prime Minister, and Skycity management is a sweet deal for Skycity. It is not a sweet deal for us. Skycity is basically increasing its revenue by 25 percent and it will have recouped the $403 million it will cost for it to build its convention centre in 4 years, so the extra 23-year extension to its licence was for free. It was for free. Generally, it would have to pay millions for that. How come our Government did not factor that in to the negotiations? Minister Joyce, in his introductory speech, said that New Zealanders will get a convention centre with little or no investment by New Zealanders. That is absolute tosh because New Zealanders will be paying the externalised costs for years to come.

We know that the Government had some information about the cost of social harm, but we do not know what that information was because it has been kept out of the public arena because Skycity, the friend of this Government, says that that information on the costs of harm minimisation or harm reduction is commercially sensitive. The taxpayers of New Zealand will be covering the costs while Skycity reaps the profits. We know that 40 percent of those profits that it makes come from problem gambling. We will pay for the increase in crime, the increase in neglect, the suicide, the family erosion, and the harm to our communities. We will be paying for the crime that occurs to businesses and not-for-profit organisations when they deal with theft by their employees who are fuelling their gambling addictions. It is us who will pay for that.

We know that for every pokie machine of those 230 that are put into this casino in exchange for a convention centre, 0.8 of a problem gambler is the by-product of that machine. We know that last year alone there were 89,000 people in Aotearoa New Zealand who were harmed by someone with a gambling problem. We also know, through the officials’ own information, that they estimate that 6,500 children will be harmed as a direct result of this deal. This is incredibly disappointing legislation. The Government has a one vote majority to pass it and it will be a conscience vote. I implore the members of the House on that side to seriously consider their consciences and to consider what their constituents want before they cast their votes tonight.

SCOTT SIMPSON (National—Coromandel): The constituents of Coromandel want jobs, they want opportunity, and they want a chance to share in the great wave of tourist convention people who will come to Auckland and then, on the shoulder of their conferences and conventions, want to explore other parts of our beautiful country. My colleague Mark Mitchell made the point earlier this evening that people will want to go up to his electorate of Rodney, and so too they will want to come to Coromandel. They will want to come to Coromandel to explore the lovely, beautiful scenic attractions we have, like the white sandy beaches, and they will want an opportunity to experience the terrific quality of parliamentary representation.

Tim Macindoe: They’ll come to Hamilton West as well.

SCOTT SIMPSON: And they will come to Hamilton West as well. So this bill, the New Zealand International Convention Centre Bill, represents a very good deal for the people of Auckland. It represents a very good deal for the people of New Zealand.

It strikes me as being somewhat truly bizarre that in 2001 a Labour-Greens administration supported a deal that was less favourable to the taxpayers than this one, less beneficial to New Zealanders, and yet it supported that deal. Did we hear a squeak? Did we hear a tweet? Did we hear a single word of opposition from the Greens to that deal? Not a single word, and now, today, we have all these bucketloads of crocodile tears—

Jami-Lee Ross: Sanctimonious.

SCOTT SIMPSON: —about a significant deal that will be good for all New Zealanders. It is sanctimonious. My friend the member for Botany says that it is sanctimonious and he is absolutely right.

This deal represents an exceptionally good opportunity not only for the people of Auckland but for surrounding districts as well, because in the shoulder seasons we want tourists. We want them to come. We want them to come to New Zealand. We want them to experience the great delights that we have as a nation, and this convention centre will help achieve that. I heartily commend the adoption of the second reading of the New Zealand International Convention Centre Bill to the House.

The question was put that the amendments recommended by the Commerce Committee by majority be agreed to.

A party vote was called for on the question, That the question be agreed to.

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 59

New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1; Independent: Horan.

Question agreed to.

A personal vote was called for on the question, That New Zealand International Convention Centre Bill be now read a second time.

Ayes 61

Noes 59

Bill read a second time.

Bills

Industry Training and Apprenticeships Amendment Bill

First Reading

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): I move, That the Industry Training and Apprenticeships Amendment Bill be now read a first time. I nominate the Education and Science Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 10 March 2014. This bill is a vital part of the Government’s comprehensive reforms to industry training to achieve better performance for employers, for trainees and apprentices, and also for taxpayers.

To explain the purpose of the bill it is necessary to provide a bit of context. In the decade up to 2010 Government funding for industry training organisations and industry training almost trebled. Unfortunately, those funding increases were not matched with sufficient accountability for taxpayers’ money. Although there was an increase in recorded industry training participation, it did not, in fact, represent value for money. Qualification completions and credit attainment by trainees during this period were very low. In fact, under the previous Government up to 100,000 people a year who were listed as being in industry training were, in fact, phantom trainees, who achieved no credits, and in a limited number of cases were no longer alive. This situation—

Grant Robertson: How much? How much is “up to”?

Hon STEVEN JOYCE: About 100,000 a year.

Grant Robertson: No, you said “up to”. What’s the number?

Hon STEVEN JOYCE: If you want me to count—you do not want the answer to that question. This situation was, obviously, unsustainable. The Government took quick and decisive action. Our operational changes led to significant improvements in both qualification and credit attainment, which is ongoing. It has freed up funding for reinvestment in the system.

The next step was to take a more fundamental look at the policy settings of the industry training system, and we initiated a comprehensive policy review to assess whether the current model was fit for purpose. The review was informed by extensive consultation with the industry training sector and industries, and it found that there was significant room for improvement, particularly in the quality of service provided to both employers and trainees.

In January this year we announced a further package of policy changes to industry training. The changes are all about increasing the opportunities for in-work training for New Zealanders by expanding and improving our apprenticeship system and reinvesting some of the money saved through our operational changes. We have announced the establishment of the New Zealand Apprenticeships scheme. These combine Modern Apprenticeships and other apprenticeship-type training into a premier vocational qualification. New Zealand Apprenticeships will provide the same level of support and the same level of subsidy for all apprentices, regardless of their age. We have also boosted the educational content of apprenticeships by requiring all apprenticeship programmes to be at least 120 credits and to result in a level 4 qualification.

We have increased the funding for apprenticeships. This increased funding will allow industry training organisations to invest in the quality of education for apprentices. It will enable industry training organisations to lower fees for employers and encourage growth in the uptake of apprenticeships. The apprenticeship reboot has been under way since March of this year. The first 10,000 new apprentices enrolled since March have been eligible for a grant of $1,000 towards their tools and off-job costs, or $2,000 if they are in priority trades, with the same amount paid to their employer.

I announced a couple of weeks ago that the reboot scheme has already signed up 8,000 new apprentices in only 7 months. It has resulted in a 67 percent increase in people commencing apprenticeships compared with the same period last year. Two-thirds of all apprentices who have signed up have been in the designated priority trades, such as construction, engineering, infrastructure, and electro-technology. The Industry Training and Apprenticeships Amendment Bill will support these initiatives by enabling the establishment of a comprehensive New Zealand apprenticeship system, refocusing the role of industry training organisations on standard-setting and arranging training, and strengthening quality assurance of the industry training sector.

The first objective of the bill is to enable the establishment of comprehensive New Zealand apprenticeships that provide the same level of support to all apprentices, regardless of their age. The bill repeals the Modern Apprenticeship Training Act 2000 and amends the Industry Training Act 1992 so that legislation relating to industry training and apprenticeships is located in one modern piece of legislation. The bill defines “apprenticeship training” and removes the existing age restrictions on apprenticeship training. It defines the functions of the Tertiary Education Commission and prescribes the duties and responsibilities of organisations that arrange apprenticeship training.

The bill also allows the responsible Minister to issue a code of practice for apprenticeship training and to set guidelines for organisations, employers, and apprentices. Industry training organisations and other organisations that arrange apprenticeship training will have a statutory responsibility for ensuring that apprentices receive appropriate pastoral care and support. This will mean that the organisation responsible for an apprentice’s training will also be responsible for their pastoral care.

The second objective of the bill is to focus industry training organisations on two core responsibilities: setting skill standards for their industries, and arranging training. The bill removes the industry training organisations’ statutory skills leadership function, which requires them to identify current and future skill needs for their whole industry. Removing this role will encourage industry training organisations to focus on arranging training for employees, which businesses have told us is the service that is of most value to them.

I want to be clear that removing their statutory skills leadership requirement does not prevent them in any way from undertaking skills leadership. Rather, it will incentivise other organisations, such as industry associations, to take a greater role in skills leadership alongside industry training organisations. This will improve links between the Government and industry in determining present and future skill needs. The bill also prevents industry training organisations from owning registered private training establishments. This removes the possibility of industry training organisations directing trainees towards institutions in which they have a financial interest.

The third objective of the bill is to strengthen the quality assurance framework for industry training organisations. At present, the Industry Training Act 1992 does not require an organisation to satisfy any particular quality assurance standards in order for it to be recognised as an industry training organisation. The bill addresses this by giving the New Zealand Qualifications Authority power to prescribe quality assurance requirements for industry training organisations.

The bill also strengthens the quality assurance framework by giving the New Zealand Qualifications Authority power to impose a graduated regime of sanctions in order to address poor performance by an industry training organisation. The authority will be able to issue quality assurance improvement notices to industry training organisations to address poor practice outside the scope of prescribed quality assurance requirements, and to issue compliance notices to an industry training organisation that does not meet quality assurance requirements, or fails to respond to a quality improvement notice. The responsible Minister will then be able to impose conditions on an industry training organisation’s recognition if it has not complied with these initial sanctions.

The Industry Training and Apprenticeships Amendment Bill is a vital part of the Government’s revitalisation of industry training to get the best results for employers and for trainees. It completes the implementation of the industry training review. It will boost system performance for all parties and build greater links between the Government, the industry training sector, and the industries that employ the trainees. I commend this bill to the House.

GRANT ROBERTSON (Labour—Wellington Central): I rise on behalf of the Labour Party to support the first reading of the Industry Training and Apprenticeships Amendment Bill, with some caveats, which I will come to shortly. The Minister for Tertiary Education, Skills and Employment indicated a number of reasons and purposes for the bill but he failed to mention two or three particular areas that are of some concern to the Labour Party, which we would like to see explored at the Education and Science Committee.

It is timely for a relook at the legislation and regulation around apprenticeships and industry training. At no time in New Zealand’s history has it been more important that we have robust, efficient, and effective apprenticeship and industry training schemes. We have currently under way in Christchurch the most significant rebuild of any urban centre in New Zealand in our history. It requires a huge amount of skilled staff to be available. It requires ongoing training to be available above and beyond what is required in the normal day to day of the New Zealand economy. It is on that point that I want to make a couple of comments of context of my own, in comparison to the context that the Minister gave. He is correct to say that a large amount of funding and support went into industry training and apprenticeships in the first decade of this century. In the case of apprenticeships, that was because the National Government of the 1990s had completely undermined the apprenticeship system, to the point that there basically was not one any more. The incoming Government in 1999 realised the folly of that move by the National Party and introduced the Modern Apprenticeships scheme. By the time Labour went out of Government in 2008 the scheme had had around 15,000 people through it as Modern Apprentices. It was an excellent scheme for its time, making up for a very, very poor record from the National Government.

At the same time, there was a significant investment in industry training. Industry training is an important part of productivity in the workplace. It is a significant part of what businesses need to do to ensure that their workforce remains skilled and that they are able to take advantage of innovation, develop new products, and keep their businesses running well. So we want to see a large number of people in industry training.

It is fair to say that there were some issues with the way in which industry training funding occurred during that period. The review that has been undertaken has highlighted a number of those. There has been significant change in the industry training sector as a result of that. But in reality, when we look at the record of this Government, what we see is that through until the beginning of this year there was a huge drop in the number of people undertaking apprenticeships—under National, around a 20 percent drop in the number of people undertaking apprenticeships and around a 38 percent drop in those undertaking industry training. As I say, some of that can perhaps be explained. But the huge drop in the number of apprentices is a massive wasted opportunity.

I want to give some credit to the Hon Phil Goff. When he was Leader of the Opposition in the immediate aftermath of the earthquakes in Christchurch, he said: “We need people training right now, because when this rebuild starts or really gets under way in a couple of years’ time, we as a country are going to need those people trained and ready to go.” But it did not happen. There was a continuing drop in the number of apprentices and in the number of industry trainees in the Canterbury region.

Colin King: Who’s going to employ them, Grant?

GRANT ROBERTSON: Colin King says there is no one to employ them. That is the lack of vision that Colin King has. When the Labour Party went to the electorate in 2011, we said that we would take that money for the dole—money that people are being paid when they are on the dole—and give it to an employer to subsidise an apprenticeship, because just sitting on your hands, as the National Government did for 3 years, and saying “We can’t help here; there is nothing we can do.” is not being a responsible Government. A responsible Government gets alongside business and says: “In the down times we are going to be here to make sure that people are being trained so that when the economy picks up, and when the rebuild starts, there will be trained apprentices.” But that is not the vision of this Government. It sits on its hands and it waits.

What we now have is a slow, lethargic response from the National Party to finally get itself going to have some kind of apprenticeship scheme. There has been a big increase in the number of apprentices and industry trainees this year. Finally the National Party has caught up with the importance of having apprentices and industry trainees on board, but what a wasted opportunity over the last couple of years from this Government.

That brings us to this bill, the Industry Training and Apprenticeships Amendment Bill, which, as the Minister for Tertiary Education, Skills and Employment has said, has a number of changes in it to the way industry training organisations operate. From the Labour Party’s perspective, many of them are worthy of being looked at. We want industry training organisations focused on the delivery of training and the maintenance of skills standards. We think that they are the core roles of industry training organisations. I personally have never been a fan of prescribing the number of industry training organisations that there should be, but I believe that some of the mergers that have occurred over the last couple of years have actually been quite sensible, and are going to deliver better industry training standards. I do not think that saying that we are going to have eight or six or nine is the way to do it. It is about getting the industry training organisations together. This part of the legislation will be useful for that.

I am also encouraged by the improvements around quality assurance. It is vital that the New Zealand Qualifications Authority is playing its role in making sure that the taxpayer investment here is of the highest standard, and also that the delivery of training is meeting the needs of employers and, indeed, of trainees and employees. So we are pleased to see those changes.

The area that is of significant concern to the Labour Party, which the Minister did not speak very much about, is clause 15 of the bill, which inserts new sections 11A to 11F into the Industry Training Act on the funding of industry training organisations. New section 11A allows the Tertiary Education Commission to enter into funding agreements with non - industry training organisation persons to provide industry training. It runs through a series of things that can be done. Essentially, that means that organisations that are not industry training organisations can start delivering industry training and receiving funding from the Tertiary Education Commission. This is to implement the idea—

Colin King: What’s wrong with that?

GRANT ROBERTSON: “What’s wrong with that?”, says Colin King. Well, is it not important, Mr King, that we have a high standard of industry training? Is it not important that there is consistency in industry training? But, no, what the National Government is proposing here is to reward its mates once again. So if a business comes along and says: “We do not want all of this palaver where we actually have to work with other people in the industry, where we actually have to make sure that we have got some consistency, and where there are some transferable skills being taught. Let us not worry about that.” Let us just have a business that says: “We are big enough. We are going to take the funding.” Well, we have concerns about that on this side of the House.

In fairness to the Minister he was up front about this when he announced the New Zealand Apprenticeships scheme, and he did say that they would be looking to run a trial whereby non - industry training organisations were able to receive this funding—that is, direct funding to a business to organise industry training. We are concerned about that because it is in the name—industry training. It is about the development of a workforce that can work across a range of businesses and that gets skills that are generic enough to be able to be used wherever they may end up in their career. We are concerned that this provision will put that at risk. We do not believe it is necessary. We think that industry training organisations are developing in such a way that they can meet the needs of business, but we are prepared to send this bill to a select committee so that we can have this debate. It is a useful time to relook at the structure around industry training and apprenticeships, and we look forward to the range of submissions that I believe will come in. But I do want to express concern about this. I think there are other clauses in the bill as well that need to be looked at, and other issues in the industry training sector. I am very confident that those who will speak after me will raise some issues.

I note one of those in closing, which is that there is a useful clause in the bill that encourages industry training organisations to focus on the needs of Māori and other priority population groups in relation to industry training. I am sure my colleague Carol Beaumont will speak a little about the failure of this Government to engage one priority population group in industry training and apprenticeships, and that is women. But with that, we will support this bill to the select committee and look forward to ongoing debate.

Dr CAM CALDER (National): It is a great pleasure to rise and take a call on the Industry Training and Apprenticeships Amendment Bill. I thank my colleague Grant Robertson on the other side of the House for his contribution. We will look forward to dealing with that when the bill is referred to the Education and Science Committee.

The Industry Training and Apprenticeships Amendment Bill is a vital part of this Government’s investment in industry training. As we heard from the Minister for Tertiary Education, Skills and Employment when he made his first reading speech to the House, in the 10 years to 2010 Government funding for industry training organisations almost trebled—almost trebled. Unfortunately, the funding increases were not matched with sufficient accountability for the funding. We heard that under the previous Government around 100,000 people a year listed as being in industry training were in fact phantom trainees—phantom trainees.

I am not sure whether that was “Mr Walker”, “The Ghost Who Walks”, or whether we might have had Clark Kent, or possibly Sherlock Holmes, but there were a lot of people who did not actually exist. [Interruption] They achieved no credits—not surprisingly—because they did not exist, and in fact some, Mr Prasad, were dead. Yes, Mr Prasad—actually dead. They were not trainees. They were not in training. They were not alive. That parrot was nailed to the perch, Mr Prasad. Under Labour some industry trainers combed the headstones in graveyards or drew from The Egyptian Book of the Dead to get the names for their trainees.

Progress in improving students’ skills and achievement levels was zombie-like. The sector was in a parlous state due to Labour’s lack of oversight for those who were actually alive. That led to the level of training they received being such that it was insufficient to unlock the potential that lay within each one of them. So this bill is extremely important. The Minister got on top of that situation. The Minister has created a bill that, it is good to hear, has received a certain amount of support already across the House. We are overseeing a focus and a move to a results intention in industry training—a results preoccupation. We want to see that those who put in the hard time and effort are rewarded. We want to see that they are in quality training and getting good results so that they can go out and unleash the potential that lies within them all—because it is results that determine the skill level of the workforce, not intentions.

This bill, the Industry Training and Apprenticeships Amendment Bill, implements the findings of the widespread Government industry training review we undertook. The review led us to uncover this vast walking army of the living dead—who did not actually exist—and to establish a comprehensive apprenticeship system for the future. It also builds greater links between the Government and the industry training sector.

The key things we are aiming to do are to improve results for trainees and apprentices, keep more 16-year-olds and 17-year-olds engaged in vocational training, and help young people on benefits get into training. This is really, really important. If we can help folk who are on a benefit, give them the skills so they can go out and get a well-paying job, it helps them and ultimately it helps our country. We want to help students—it is not rocket science. It is simply that we want to ensure that we help students get the results and the skills they need to succeed in this increasingly complex life.

We will continue to work to improve tertiary education and lift achievement for our students, and to focus on better outcomes not only for students but also for the taxpayers—not only for students but also for the taxpayers. We know that tertiary education is a passport to higher skills, higher wages, higher productivity, and higher growth for our economy. So ultimately “New Zealand Inc.” wins. There is a personal win for the individual concerned, but ultimately our society wins. People are healthier. We know from work done in the UK that a job is one of the greatest determinants of a person’s health. So we know that our population will be healthier and they will be happier if they have the opportunity to get a well-paying job. That is what this Government is doing. It is also growing the economy so there are more jobs out there for those with the skills.

We reviewed industry training over 2011 to 2012, and we found that some changes were necessary for the industry training system. We want to make sure that it is well connected to industry, with high employer buy-in; that it is educationally sound; that it is coherent with the wider tertiary system; and that it delivers value for money for the employers, for the Government, and also for the student. This bill makes the amendments required to implement the findings of the review. I look forward to talking further about this bill as it progresses through the House, and in the meantime I commend the bill to the House.

CAROL BEAUMONT (Labour): I follow my colleague Grant Robertson in speaking in favour of the Industry Training and Apprenticeships Amendment Bill. Labour is supporting this bill’s referral to the Education and Science Committee because we are strong supporters of industry training and apprenticeships. We would welcome improvements to the system. We would welcome a greater focus on industry training and apprenticeships. We would welcome greater numbers, and we certainly have absolutely no question about wanting to ensure quality.

Industry training and apprenticeships provide a lead-in for people to get decent jobs and be paid decent wages, as well as providing the important trades and technical skills that this country needs and so sorely lacks at the moment. Labour is committed to ensuring that New Zealand has the skilled workforce we need. We want to see New Zealanders have jobs and opportunities, and we do not believe that this Government has truly focused on those areas at all. The shortage of skilled tradespeople in this country is absolutely criminal. It is a serious concern, and it is one that has been exacerbated by this National Government over the last 5 years by its failure to invest in apprenticeships and industry training. We export our skilled tradespeople and then we have to import them back again. This is a nonsense, an absolute disgrace.

We do support this bill, and we look forward to discussing at the Education and Science Committee how we can really make progress. Industry training is incredibly important. It is about providing the technical and trade skills this country needs. They are the sorts of skills we need in manufacturing. But, of course, industry training has been, under this Government, the Cinderella of tertiary education. It actually fails, generally, to even get across the Government’s radar. Of course, the manufacturing sector itself is languishing, and that is despite the fact that manufacturing—the ability for us to make things in this country—is absolutely important.

Manufacturing has an important multiplier effect in terms of employment opportunities. The figure that people talk about is two or three jobs arising from each job in manufacturing. It is very different from the service sector. So we need these skills in trades and technical areas, not just for manufacturing but also for our building and rebuilding, for the housing that this country is so sorely lacking, particularly in Auckland and Christchurch, where there is an absolute shortage of housing for our people. Skills in trades and technical areas are important for being able to deliver infrastructure development and the rebuilding of Christchurch, and yet we have these huge skills gaps at the moment.

Investing in industry training and apprenticeships will provide jobs for New Zealanders. As I have said already, at the moment we are, instead, exporting so many of our trades and technical people. They are over in Australia—hundreds of thousands of them. We have replaced them. We have had the nonsense of having to import skilled people to work on the Christchurch rebuild because the Government failed to take the opportunity after the earthquake and realise we were going to need more people in construction, for example. So at a time when we have got high unemployment, especially around young people, we have got major skills and training deficits. It is just nonsense.

The other important factor about investing in industry training and in apprenticeships is that it does lift productivity. There are countless pieces of research showing that investing in training at the workplace level, investing in that technical training that is needed on the job, actually lifts productivity in our workplaces, and certainly we sorely need that. So that is the context in which this bill presents itself to the House, and those are the sorts of questions we will be looking at in terms of this bill.

It is also important that industry training and apprenticeships provide people who are not going through our university sector with real qualifications that mean something and provide them with employment security. We know that in a modern economy jobs will change fairly rapidly, and that the idea of job security is actually an idea that is very outdated. But we do need to look at investing in training so that people have employment security and have skills that are transferable and portable.

What is the Government’s record in this area? Well, I recall that it started off fairly early on in the piece in the last term of this National Government. I think it was actually when the member opposite, Kate Wilkinson, was the Minister of Labour that she was part of scrapping the skills strategy, because the Government does not believe in actually having a plan. The Government does not believe in having a plan about what skills we might need in our economy.

There was an agreed skills strategy. Business, unions, Government agencies, and industry training organisations had got together and said: “Here’s a plan. Here’s what we need.” But, no, the National Government, when it came in, said: “Oh, no. That was the previous Government. We’ll scrap that. We won’t bother actually trying to build a consensus around this issue. We’ll just ignore it.” I have to say that was a major sign of what was to come. Of course, the National Government has taken money from industry training and put it into other parts of the tertiary sector. I have no problem with funding our universities and our polytechnics properly. We need to do that, but we need to invest money in industry training too. This Government ripped money out of that part of tertiary education and put it elsewhere. When unemployment is at such a high level, providing training and skills opportunities for young people in trades and technical areas is a really important pathway forward.

I notice that the regulatory impact statement had quite a good analysis of the rationale for Government involvement in industry training. I just want to take a second to talk about some of the things it identifies, because it recognises that investment in this part of the tertiary education sector has a number of what it calls “spill-over benefits” and that there are not only improved employment outcomes—which I have already mentioned—but flow-on benefits to things like improved health outcomes and improved child development outcomes. This is a way of potentially investing in people who have not necessarily done that well in the academic streams in their schooling life and have not necessarily gone on to a tertiary education institution, but who actually want to learn technical skills for their employment. I just wanted to acknowledge that that is recorded in the regulatory impact statement.

My colleague Grant Robertson talked about the fact that this bill does mention in clause 15 provisions around priority groups. It specifically talks about Māori and Pacific workers, and this side of the House has no problem with that. But the shame at the moment is the situation around women and industry training. It is absolutely appalling. The percentage of women as industry trainees has dropped over the last few years. It was 30 percent in 2010 and it is down to 28 percent this year. When you break it down by industry, it becomes even more shocking. We have got a pool of over 50 percent of our population who are not being targeted to move into industry training to get those crucial trades and technical skills.

One percent of the trainees in building and construction are women. In joinery it is 6 percent. In electrical supply it is 7 percent. In the motor industry it is 3 percent. In infrastructure it is 6 percent. This is just appalling. This is coming from a Government that says “Well, we are not going to do anything about revaluing the occupations where women are concentrated, like aged care. We don’t believe that those workers are low-paid or undervalued.” The real solution, says the Government, is to move women into higher-paying jobs.

Well, I have to say that the record on industry training does not show a great deal of movement of women out of industries like aged care—which does need valuing properly—and into better paid trades jobs. So you would have to say that is a big fail. There is nothing going on there. The Minister’s best attempt was to say that the Ministry of Women’s Affairs is working on it. Well, I think that is a research project and a leaflet. Thank you.

DAVID CLENDON (Green): I think it is fair to say that this Industry Training and Apprenticeships Amendment Bill has come to the House not a moment too soon. The primary legislation that it seeks to amend dates back to 1989, 1992, and the year 2000. The point has been made by Labour colleagues that it was blindingly obvious a number of years ago that we were looking down the barrel of a serious skills shortage—a trades shortage—in this country. It has taken rather a long time for this endeavour to improve that situation to come to the fore. Having said that, we do see that it is timely to take a fresh look, and to the extent that this bill endeavours to do that, we are able to support this legislation, albeit with a few reservations. We are particularly interested in the select committee process, as indeed we always are with new legislation. We think that there are a number of key stakeholders in this who will have interests, opinions, and positions to offer that almost certainly will enable us to make this adequate piece of legislation a better piece of legislation as we go through the process.

I think that part of our problem has been that over recent years—and it might be heretical from someone who has both studied and taught in a university situation—we have perhaps oversold the value of university education, at the expense of advocating for trades and vocational training. I think we need to reverse that and to give our young people a much broader and deeper picture of the value of not only university education. I think we do need to look very hard at the messages that young people in particular are receiving about the value and importance of trades and vocational training more generally.

The bill prescribes a number of functions and responsibilities to various agencies, including the Minister for Tertiary Education, Skills and Employment, the Minister’s office, the Tertiary Education Commission, the New Zealand Qualifications Authority, and the industry training organisations themselves—those currently existing and any that might be appointed or accredited in the future.

I think it is possible to feel some unease at how quickly the various provisions—particularly those provisions that prescribe certain processes in this legislation—could very easily degenerate into a sort of tick box mentality, where as long as people jump through the correct hoops in the right order, then all will be deemed to be OK. I am thinking in terms of things like the criteria for accreditation, the quality assurance requirements, and the measuring of the capability and capacity of the industry training organisations to fulfil their functions and their roles. These are all important considerations, but my experience in the tertiary sector and elsewhere leads me to have some concern that these things very quickly become bureaucratised. They simply become little hurdles to jump over on the way. They lose their value, their richness, and their quality.

I would hope that there would be sufficient goodwill to ensure that there is a very robust, a very transparent, and an ongoing engagement between the key stakeholders. Obviously, they will be the regulatory authorities, the Government agencies, the industry training organisations themselves, and the providers of education and training, but not forgetting, of course, the apprentices and the trainees who will enter into the various programmes that will emerge from this legislation, under the conditions that it prescribes.

I think it is important that we do have a genuine and ongoing dialogue within and between those groups to ensure that we achieve the right balance. We want to make sure that influence and responsibility for the ongoing delivery of industry and vocational training sheets home to the appropriate level and in the appropriate time and place, so that we can look with some confidence to a system and to a model that will produce the tradespeople that we want and need going into the future.

The point has already been made, but I think it is worth repeating, that we are desperately short of tradespeople in New Zealand, right across all of the trades, I think. Construction tends to get the spotlight, if you like, for very obvious reasons, but equally, in engineering and elsewhere, we are short of people. Things as simple as motor mechanics, electronics, electrical trades—we are short of skilled people in all of these, to the point that we are importing tradespeople, while also sitting on historically high levels of youth unemployment. There is an obvious disjuncture there. One would hope that some of the provisions of this bill might offer some way to resolve that.

I think that a point that is often overlooked too is that historically the public sector—the much-maligned public service—contributed a regular and reliable supply of tradespeople into the private economy as well as into the public economy. We had the railway workshops, the Post Office, as it was then, and the defence forces, which provided us with fitters, with turners, with welders, with diesel mechanics, with air frame fitters, with pilots, and with boat builders. If you look at the New Zealand superyacht industry, you will find an awful lot of people there who trained in the navy. I think that is something that we have thrown out. One of the babies we have thrown out with the bathwater, in terms of driving down the capacity of the public service, is that we have lost that important supply of trades. Now it is coming back on to the education providers and on to industry to try to plug the gap that has emerged over time.

Again, the point has been made that the legislation requires industry training organisations in the future to have particular regard to the needs of Māori and other population groups. Of course, that begs the question of who is being talked about here. We can look to the education strategy that focuses particularly on Māori and Pasifika, as does this bill, and it talks about youth to some extent. But I think that is a little bit lazy. I think we need to drill in a bit more and perhaps even highlight what the priority groups are that we are talking about. I think we need to identity them. Carol Beaumont has offered one compelling suggestion, which is that women need to be included in that. But I do think that the overall strategy will be weakened if we do not think a bit harder, a bit more seriously, and with a bit more detail about whom we are talking about in terms of priority groups and what the primary needs are. I think it is obvious that young people in the regions and in the provincial areas, who could very well miss out on some of this if they have not got ready access to one of the key providers, should be treated as a priority group. I do think we need to be a little bit more definitive in terms of whom we are talking about there.

The bill makes it clear that industry training organisations may not own or be beneficial owners of registered private training establishments. I think that is a good provision. The industry training organisations themselves may have an opinion on that, and it will be interesting to hear from them if they have any major concerns with that. But on the face of it, it seems an obvious division to make—that industry training organisations ought not to be directly involved in ownership or be beneficiaries of a private provider.

I mentioned earlier the quality assurance improvement provisions in this legislation. One of those will allow the New Zealand Qualifications Authority to impose some compliance measures in the face of poor educational outcomes. Again, I think we need to be a bit careful about some of that language, because, yes, if trainees and apprentices are failing to complete and if the skills are not coming through, there are some obvious failures that can occur in any training or educative programme. But around the margins, we have seen recently, for example, an attempt to use very crude numbers about completion of courses as indicators of the failure of the institutions providing those courses. That is a very crude and unsatisfactory measure and I would hope that we would not resort to such inadequate measures when we are measuring educational outcomes. They need to be much more textured, much more layered, and much more sophisticated than that. It is one example where we do have to make sure that we do not simply resort to the lowest common denominator in terms of filling in the blanks that legislation inevitably prescribes.

I think my final comment—and I will no doubt return to this point again in the future—would be the question of industry training organisations being obliged to offer appropriate pastoral care and support for apprentices, having regard to age and experience. It is actually not a trivial matter for industry training organisations to undertake to accept that responsibility. Obviously, a mature person, somebody going into a second career, an older person, may—in fact, most certainly would—require less pastoral care, but what is an appropriate level of pastoral care for young people who might be from a provincial or a regional environment and are coming to a city to study? At what point is it enough, too much, or not enough? I look forward to the ongoing debate around this bill. Thank you.

COLIN KING (National—Kaikōura): It is with enthusiasm that I speak during this first reading of the Industry Training and Apprenticeships Amendment Bill. It is always good to have a conversation with the Labour Party when you are talking about industry training, because over there on the other side there is really a morass of different views and opinions, and yet you have to learn to understand the Industry Training Act from the point of view of what it actually means. You heard earlier on Grant Robertson talking about why the Government did not act earlier, but, really, in the Industry Training Act the fundamental principle is that you have got to have employment. So the employer and the apprentice work through this arrangement.

What the other side was rambling on about, and Andrew Little over there is obviously equally confused, is that there are two systems of funding. Under the Industry Training Act you have the standard training measure funding, and under the polytechnics you have the fulltime-equivalent funding. I just want to put that out there to clarify some of the double-speak that was coming from those Opposition members.

What is happening here in this bill is very opportune and very appropriate, and, again, it adds to the suite of legislation that will add value to industry training and add value to the pathway of industry training, right back from the point of view of what the Government has done around the vocational pathways in the National Certificate of Educational Achievement. We now have the vocational pathways. We will have early meetings and an introduction of the industry training organisations to those students who will come on through and complete their trade training when they have employment funded under a standard training measure model. So it is very appropriate that the Minister for Tertiary Education, Skills and Employment has brought this bill to the House.

I just want to reflect for a moment, for the benefit of Andrew Little, on the wasteful spending of the Labour Government when it had its Modern Apprenticeships programme. I can remember actually studying one of the Modern Apprenticeships coordinator’s performance. It spent $250,000 and never had one completion of a Modern Apprenticeship.

Simon O’Connor: How much?

COLIN KING: The sum of $250,000 was paid out to a Modern Apprenticeships coordinator and it never had one completed Modern Apprenticeship. That was typical of the wasteful spending under Labour. We saw it in health.

Andrew Little: Go back to the Tourism Board.

COLIN KING: We saw it in health, Andrew Little. We saw it in health. Labour doubled the spending but did not get any more performance. What did Labour do in industry training? It tripled the pay, tripled the amount of money going into it, with no better quality.

What have we got today, under this bill? We have got the New Zealand Apprenticeships, and this will provide a level of training to an apprentice regardless of their age. That is exceptionally good thinking.

What actually happened under Labour was that you would go into a factory and you would have two Modern Apprentices and you would have six older apprentices, and they would all get the same deal. It was just a sort of snout in the trough way of funding. It was very, very poorly run. What we have got today is far more refined. I must pay respect here to Lockwood Smith. Lockwood Smith would be so pleased to see that we are finally starting to get to a stage where his vision around industry training will be met. It is so very sad that those people over on the other side who profess—and I use that word carefully—to represent the workers do not have a clue.

I go back to what Grant Robertson was saying: imagine trusting employers to deliver training! Well, I am afraid that there are a lot of wonderful employers out there who do the training. Tell that person over there who spoke so disrespectfully about our business people, who are the backbone of this country, our employers.

Andrew Little: How’s this member’s relationship with Anadarko going?

COLIN KING: Andrew Little should just breathe through his nose and actually apologise for the reckless, wasteful spending that we saw from the Labour Government in the industry training and apprenticeships situation.

It is a real pleasure to support this bill. I look forward to working with the sensible, grounded people of the Education and Science Committee. We will get the bill reported back to the House, I am sure, by 10 March 2014. Thank you.

TRACEY MARTIN (NZ First): Kia ora, Mr Assistant Speaker. Thank you very much. I rise on behalf of New Zealand First to speak in support of the Industry Training and Apprenticeships Amendment Bill. I look forward, as my learned colleague Colin King just said, to discussing the bill with the right-minded, level-headed people of the Education and Science Committee. If we go back to the bill and away from the political rhetoric for just a moment—actually, before I do that, I would have to say to Mr King that people who live in glass houses should not throw stones. Considering that Novopay was paid when its key performance indicators were not met, I do not think the Government should actually be launching any rockets towards the Labour Party with regard to the Modern Apprenticeships scheme.

The amendments in this bill are to implement the findings of the review. The general policy statement of the bill states: “The review found that changes were needed to ensure the industry training system, which includes apprenticeship training,—is well-connected to industry, with high employer buy-in; and is educationally sound; and is coherent with the wider tertiary system; and delivers value for money for employers and the Government.” I want to note that that fourth bullet point makes no statement about value for money for the apprentice. I know that we have said that out loud, but it is in the explanatory note and I think that will be one of the points I will be raising with the Education and Science Committee. There must be value for money for the apprentice.

New Zealand First is very pleased to see that the first bullet point under the policy objectives is to “establish a comprehensive apprenticeship system that provides the same level of support to all apprentices, regardless of age;”. New Zealand First has always been a strong supporter of lifelong learning. We actually mean that; we mean that you should be able to learn for the length of your life.

I believe that Carol Beaumont brought our attention to the situation of women in today’s society. The ability of women to enter training or education perhaps in their 30s and 40s is of particular significance to women because, like it or not, we bear the children. More often than not, it is us women who leave the workforce for a period of time in order to stay with those children. So to come back and to be able to access learning, lifelong learning, is a very important thing to us females.

It also says here that the bill is about the focus of the industry training organisations on “setting skill standards for their industries and arranging training;” and to “clarify the functions and powers of the New Zealand Qualifications Authority …”. We are hopeful that this amendment means that we are actually going to minimise, perhaps, the number of qualifications that we are seeing out there. We are hoping that we are going to create a clearer standard around industry training certificates or qualifications so that the parents of students, the parents and the future apprentices, can be more confident that when they sign up to an apprenticeship, they are getting high-value credits and a high-value qualification, because, at the end of the day, apprentices also pay for that training. So we will be very keen to talk about that a bit further.

As many have already mentioned, the bill “requires ITOs to have particular regard to the needs of Māori and other priority population groups,”. We will be very interested to discuss what that actually means. It is all very well to put these statements in bills and in legislation. It says that there must be particular regard given to the needs of Māori and other priority population groups “when developing and maintaining arrangements for the delivery of industry training.” My fellow colleagues on the Education and Science Committee will testify to the fact that I sometimes ask the questions that nobody else asks. One of them would be around this particular statement in this bill, which is how a small engine apprenticeship would be delivered differently for Māori than for anybody else. That statement suggests that you actually need to have particular regard when developing and maintaining arrangements for the delivery of industry training. So that would be an interesting conversation that we would like to have. I think I would also like to extend that to how that would look different for women.

We are concerned that statements like that take away from the good work that has been done around the vocational pathways by the Ministry of Education and this Government. It is going to be modified in some way. Anybody who requires an apprenticeship to create a sustainable vocational pathway is a priority to New Zealand First. So we would be looking forward to a conversation around that.

We also have some concerns around the New Zealand Qualifications Authority, which operates on a cost-recovery model. The bill allows the New Zealand Qualifications Authority to charge fees to industry training organisations for its new quality assurance activities. Will the businesses that are able to gain this funding also have to pay those fees? There is some concern, we believe, among the industry training organisations themselves, and around this fine print around businesses being able to deliver these services and whether they will also have to pay the fees and meet the same standards. The conversation needs to take place.

We have had some talks. New Zealand First talks quite a lot, actually, when I am talking to educational groups, about widening the success criteria, and we see this as part of that move towards widening the success criteria, rather than this narrow sort of sausage machine that we are currently working with. So we are pleased to enter into this conversation. Throughout the history of our party, which is close to 21 years, we have always supported the training of New Zealanders and the fact that skills shortages should not be used as an excuse for mass immigration. This has been ignored, largely for the 20 years that New Zealand First has been saying it. So it is nice to hear the Green Party actually vocalise that right now, and I believe that other parties in the House are coming to the same conclusion. We cannot keep importing skills and letting our own people be unemployed. New Zealand First 100 percent supports the concept that New Zealanders should be trained before we start bringing in people from overseas.

The construction industry has been mentioned a lot with regard to this bill, but some of the other apprenticeship areas that are currently on the skills shortage list are bakers, metalworkers, plastic technicians, upholsterers, and winemakers. We would like to think that, although we are doing this work around this bill, the industry training organisations and the industry organisations are actually thinking about how we can improve, how we can widen, and how we can support in all those skills shortage areas, not just in construction because construction seems, as David Clendon said, to get the greatest amount of attention at the moment. I understand that because Christchurch is on the books, but we will live past Christchurch.

We would also be very interested in the recognition of the fact—David Clendon and the Greens and New Zealand First, again, on this particular issue, seem to have more things in common than we have against—that if we are going to support people into apprenticeships, there needs to be recognition of the loss of adult and community education in 2009, which severely hit the regional areas, and the need to support apprentices with their paperwork. It needs to be part of this conversation to make sure that apprentices in rural and semi-rural areas are able to access this sort of training. The small to medium sized enterprises in the rural and semi-rural areas are businesses that have, on average, 1.5 to 2.5 employees. They need to be able to access this support. Stonemasons are, actually, on the skills shortage list. There is a stonemason out at Leigh who would take on an apprentice but, actually, margins have been cut so low that he needs to be able to access this support from this date to be able to take on apprentices. So we want to make sure that this is available to those in the rural and semi-rural areas, even those semi-rural areas inside the super-city of Auckland. Those are the sorts of conversations that New Zealand First will be having at the Education and Science Committee, so, at this stage, we will support the bill through its first reading.

TIM MACINDOE (National—Hamilton West): My constituents in Hamilton West often say to me that they are very supportive of apprenticeships. They want to see good quality apprenticeships and training that will lead, particularly for our young people but, in fact, for all people—

Sue Moroney: And they are disappointed. They are really disappointed.

TIM MACINDOE: —into really sustainable jobs. They are disappointed, Ms Moroney, because over the previous 10 years, when your party was in Government, they saw a threefold increase in expenditure on industry training organisations for absolutely no result whatsoever. Not only are my constituents supportive of apprenticeships but also they believe in accountability for the expenditure of public money. They know, unlike the Opposition, that the Government does not have the money. It is their money, which came out of their pockets. They want to see the young people and all those who aspire to a job getting good training and delivering results for that training.

It is worth reminding the Opposition that during those 10 years at the start of this century, qualification completions and credit attainment by trainees were pitifully low. In fact, as the Minister for Tertiary Education, Skills and Employment pointed out, up to 100,000 people a year who were listed as being in industry training were, in fact, phantom trainees, many of whom achieved no credits whatsoever. That was a disgrace. [Interruption] Instead of shouting at me, Opposition members should hang their heads in shame at that.

We as a Government are determined to ensure that the changes will increase opportunities for in-work training, and that they will expand and improve our apprenticeship system. That is why this year the Budget increased—

Dr David Clark: Where are the jobs? Where are the jobs?

TIM MACINDOE: —the number of trade training placements for Māori and Pasifika applicants from approximately 600 previously to approximately 3,000 today—over the next 4 years. What a great thing that is. Dr Clark sits here in this House day after day calling out “Where are the jobs?”, even when that question is repeatedly answered and he is told to have a look at the SEEK and TradeMe websites. There are jobs out there, but what we are doing with this measure is ensuring that there will be a better fit between the training and the jobs that are there. He will remain on the Opposition benches for a very long time, until he takes his head out of the sand and recognises that reality. His party did nothing of any value for those people. We are getting on with the job and it will work.

New Zealand Apprenticeships will provide the same level of support and the same level of subsidy for all apprentices, regardless of their age. That is important because they are not all young. They are not all just out of school. We have also boosted the educational content of apprenticeships by requiring all apprenticeship programmes to be at least 120 credits and to result in a level 4 qualification. Why is that important? Well, it is important for the reason that Phil Goff told us during the last election. Labour members who campaigned at the last election, and it is all of them over there, ought to remember that when their then leader, Phil Goff, was going around the country, he was regularly quoting Brent Mettrick of Stonewood Homes, who repeatedly said that this measure, the bill we have got here, the Industry Training and Apprenticeships Amendment Bill, is exactly what is needed. He called for this, and Phil Goff said: “We will deliver.” So that is why I was astonished when Grant Robertson earlier said something completely different. It was as if he had no recollection of what his own party was campaigning on. Phil Goff supported and emphasised Mr Mettrick’s plea for the system to increase funding for apprenticeships, which would allow industry training organisations to invest in the quality of education for apprentices, lower fees for employers, and encourage growth in the uptake of apprenticeships. That is exactly what this bill will do. I am proud to lend my support to it. I know that it is going to be very good for those young people and for the country.

ANDREW LITTLE (Labour): You know, it is an incredible thing, as I rise to speak on the Industry Training and Apprenticeships Amendment Bill, that as the rest of the country is celebrating the blowing up of Parliament, when some parts of the country are celebrating a more indigenous event—that is, the events at Parihaka, the events about peace—and at a time when the Opposition is trying to assist the Government and support this bill, we have the mad rantings of the members of the Government. How amazing it is that otherwise respectable members like Tim Macindoe should want to go back 10 years but refuse to go back to 1992. How is it that members like Colin King can talk about the last 5 years but whose brain sort of does not compute when it comes to 1992? Then there is Cam Calder, who had the temerity to talk about the vast army of the living dead. I thought he was talking about the National Party conference a few weeks ago, but, of course, he was talking about the age of industry training during the Labour Government. But, again, he failed to acknowledge the disaster zone that this National Government left apprenticeships and industry training in in the period between 1992 and 1999.

That party, when it was in Government the last time, all but destroyed the hopes and the dreams of young people in this country to get on and get practical skills, to get apprenticeships, and to do on-the-job training. That was the legacy that the last Labour Government had to pick up and address and fix up, which it did with aplomb from 1999. Let us not forget the damage, the vicious damage, that the National Government from 1990 to 1999 did to industry training in this country. And National members all hang their heads in shame, as they should—as they should. I am still waiting for the apology. I am still waiting for the official apology. Maybe it will be the next generation, the young bucks of the National Party, the Simon O’Connors of the world, who when he cannot run a full marathon has to run a half-marathon. But that is still an achievement. We do not detract from that. Fresh from his half-marathon, plodding over the bridge—maybe he can offer the apology for what his predecessors did to industry training. Let us make no mistake. But I want to say, in the spirit of generosity, and as we the parliamentarians of this generation hunker down while the rest in the Commonwealth countries celebrate our blowing up, let us hunker down and let us offer the Government this support.

This bill stands in stark contrast to the National Party’s efforts last time it was in Government, in 1992. The 2000s were about rebuilding industry training and apprenticeships in this country, because the truth is that we had a massive drop-off. If you talk to tradespeople today—you will not talk to many under the age of about 45—they will say “Where is that generation behind us?”. There is an emerging generation of those who started their apprenticeships under the last Labour Government. They are in their late 20s and early 30s now, but there was that big gap. There are those who are in their 60s now, waiting to retire at 67 and pick up their superannuation, some who are being asked by their employer—

Tracey Martin: 67? 65.

ANDREW LITTLE: I know that New Zealand First supports us on this because it wants universal superannuation just as much as we do. But I have met tradespeople—tradesmen, actually, because they are all men. I met one recently who at the age of 68 has been asked by his employer whether he would be happy to work for another 5 years so that it can get the latest group of apprentices up to speed before he retires. He is a linesman. He cannot—

John Hayes: Why don’t you retire?

ANDREW LITTLE: Because, Mr Hayes, I have a lot more years to offer this Parliament than you do. The people of the Wairarapa will have something to say about that. I venture to suggest that I probably have offered a bit more to this Parliament in the last 2 years than the honourable member has in his time here, which is a lot longer than that. But I want to say this. There are some 68-year-olds, Mr Hayes—and you might want to take a lead from them—who are keen to retire and who want to make way for the younger generation, but because they are in trades occupations their employers are saying to them: “We need you to stay.” These are tradespeople whose job it is to clamber up ladders in the dead of night, during the fiercest storms in Canterbury and the rest of the country, to restore power and make sure that we can all snuggle up in our warm beds—snuggle up in John Hayes’ warm bed in the Wairarapa—

Dr David Clark: Please, no.

ANDREW LITTLE: No, no, not with him. No, he can snuggle up in his warm bed, but the rest of us do not have to join him—the rest of us do not have to join him. Employers want the tradespeople to be able to do the fantastic job they do, but they are an ageing workforce. So we have to do more.

Hon Simon Bridges: Hey, you get back to snuggling up with John Hayes.

ANDREW LITTLE: “Mr Anadarko” over there—his client companies, they need their tradespeople as well. Maybe one or two of them will be pulled from Kaikōura, although Colin King was not so sure. But we need those people. We need people to be going into apprenticeships and into industry training. This bill will go some way to do that.

There are a couple of things I want to comment on about it because this is important stuff. Apprenticeships are important. They have been important in this country since the age of Julius Vogel—the only Premier for a long time who took seriously the rebuilding of infrastructure. Of course, now we have got a generation of politicians who want to sell our infrastructure. At least Julius Vogel had the vision to build our infrastructure, and he understood the value of apprenticeships, which is why we have had them since that time. We have been very thankful for those generations of workers, of indentured tradespeople, who have come from other shores to add to our industry training and apprenticeship training capacity. That has been very important.

Industry training is very important too. On-the-job training is vital. There is a part of our cohort who do not take easily to sitting behind a desk and learning theory. They learn on the job, and they are very important to us too. We have world-class on-the-job training. We have had a world-class on-the-job training system under our industry training legislation, and we need to continue that.

The reality is, as we know, as I think this Government knows, and as we too would acknowledge, that where we got to in the 2000s was that there were some industry training organisations that were more into empire building and building up their accumulated reserves than they were into training people. I agree with the Minister for Tertiary Education, Skills and Employment, and I agreed with him at the time when I was a union secretary, about the criticism of those industry training organisations that could boast extraordinary bank balances but not much by way of the output of industry training and apprenticeships. So it was right that there should be some reform. It was right that there should be some rationalisation. One of the very good things that this bill will do is set up a programme and a means for proper rationalisation.

I remember when I sat on the board of the Tertiary Education Commission and we were dealing with industry training organisations. There were about 46 of them at that time, including one I remember very well, which was the New Zealand Equine Industry Training Organisation, which had only seven trainees. It is appropriate that I should mention that on this day of great equine achievement and, indeed, equine training achievement, with Mike Moroney and his achievements at Flemington today. But the New Zealand Equine Industry Training Organisation had only seven trainees, and we did wonder whether an entire organisation should be built around that. But the Tertiary Education Commission at the time had no levers to pull to not just encourage but sometimes compel those amalgamations and mergers, and now we will have the means to do that.

One point I do want to make is that I want to just acknowledge the strange sort of approach to tripartism. The industry training organisations always reflected a level of tripartism. The current legislation provides for workers’ representatives in governance and, of course, employers. This bill makes explicit the role of employers in the governance, but then the bill goes from section 6 on employer governance to new section 11 for workers’ representatives to be in governance. I am not quite sure why that should be reflected in that way.

There will be some questions, I think, that will be raised as we examine this, on how existing industry training organisations manage themselves. I think the Building and Construction Industry Training Organisation will stand out for attention because one of the problems it has here is that this is an industry that is crying out for more apprentices, and it has not had them. That is partly because 50 percent of its apprentices, up to now, have been labour-only contractors. They have not been employed under conventional employment agreements. We might want to say that under this legislation we should have more conventional arrangements in order to encourage apprentices. But we will support this legislation. We see great hope for it, and we will examine it closely in the Education and Science Committee.

SIMON O’CONNOR (National—Tāmaki): I am pleased to rise and speak in support of this Industry Training and Apprenticeships Amendment Bill in its first reading. As someone who sits on the Education and Science Committee, I am very much looking forward to this bill coming through. I am also very pleased to hear the support from around the House at some points in time, particularly from Opposition members. We were not sure by their words that they were in support, but they do indeed tell us that they are.

One thing we have heard this evening, particularly from the Opposition, is this whole discussion of “Where are the jobs? Where are the apprenticeships? We just made it happen in the past.” I think one of the key elements, and my colleague Colin King raised it earlier, is that to be an apprentice you need the economic opportunities and the jobs there. I can think of my brother and others who have gone through the apprenticeship schemes. A lot of the great learning comes on the job. So there is a certain irony today as the jibes from the Opposition have been pointing out why we did not have apprenticeships or larger numbers in the past. If there are not the jobs, it is always hard to correlate it to the apprenticeships. But here we have an economy growing, more jobs in the economy, and therefore more opportunities in the apprenticeship space. I was saying that what is ironic is that we have just had, before this bill, discussion around the New Zealand International Convention Centre, a great opportunity to build jobs and to build opportunities, if there is no pun in that, but also an opportunity, of course, for people to be apprentices. If you are going to learn trades like carpentry, joinery, and so on, or even be in the hospitality business, you need opportunities for jobs.

I think one of the key elements underpinning this bill is a Government committed to creating jobs, be it the convention centre or be it the work that Minister Bridges is doing around oil and gas exploration. This creates jobs. When you want to talk about apprenticeships—and Labour and the Greens have said: “Yeah, it’s a great idea. We support that.”—on the flip side you need to support the industries that create jobs.

Another one jumps to mind tonight, actually. We heard that the Government has committed $900 million to the World of Wearable Art Awards. That is going to create opportunities and jobs as well. We know that it creates millions of dollars of opportunities where those shows are held. Again, these are opportunities for young New Zealanders if they want to get involved in those areas. Think about the hospitality trade-off. There will be a number of young people who will want to work in that area.

I think what we need to stress is not only the importance of apprenticeships but also the importance of this Government’s focus on creating jobs and not putting obstacles in the way. To finish, I just want to note—

Dr David Clark: Unemployment’s up.

SIMON O’CONNOR: We have someone yelling out that unemployment is up, but, actually, he should look at the figures and the great work that has been undertaken by this Government to actually take people off unemployment benefits and off sickness benefits and put them into jobs and opportunities. What we know too is that in the decade up to 2010, the Government funding for industry training organisations almost trebled. We have also noted that during the Labour time there was an increase in industry training participation, but completion rates and student attainment were low, as a number of my colleagues have pointed out in the debate. We are not interested in just the bums on seats approach of the Labour Government. I saw it in the days I worked within the Ministry of Social Development as well. We are here to set high standards focused on real opportunities and real jobs for our young people. We back them. It is not about just talking; it is about actions as well.

We are very pleased with the reboot scheme that was announced recently. Young people can achieve up to $1,000, followed by—

Carol Beaumont: How many young women were given apprenticeships?

SIMON O’CONNOR: Someone is yelling out “How many young women?”. That is the Labour Party, you see. It wants to force everything—absolutely force everything. Actually, I am going to end with this. I am looking forward to David Cunliffe, the current leader of the Labour Party, announcing the co-leader for the Labour Party, the female co-leader, because if it is going to follow the logic of its conference, then it must be ready to appoint a female co-leader.

Hon Judith Collins: It can’t find any.

SIMON O’CONNOR: Well, yes, indeed. The Industry Training and Apprenticeships Amendment Bill—I recommend it to the House.

DARIEN FENTON (Labour): I rise to support the Industry Training and Apprenticeships Amendment Bill and welcome putting apprenticeships back into the Industry Training Act of 1992. Before I get into the bill, may I say I think the previous speaker, Simon O’Connor, is feeling just a little bit envious about the progressive Labour Party. It actually is prepared to confront the issue of gender representation, and perhaps before he criticises this party he should have a look at his own in terms of representation of women in that party. If he does not think there is a problem about women in industry training, he should go and have another look at the figures.

One of the things I think is a little bit sad about this bill, even though we support it, is that we are repairing an awful lot of damage that was done during the 1990s, particularly to apprenticeships. As we have heard tonight, Labour had to bring in the Modern Apprenticeships scheme and deal with trying to put apprentices back into the picture after they were taken out of the picture by a National Government in the 1990s.

I also just wanted to reflect on the last election, and what Labour was committing to do about apprenticeships, particularly around young people. I want to tell listeners that, actually, if Labour had been in power, by now we would have had every at-risk 15 and 19-year-old either learning or earning, and we would have provided for 9,000 unemployed New Zealanders to come off the unemployment benefit and into apprenticeships, with a subsidy of $8,727, equivalent to the dole, going to employers willing to offer a permanent full-time job. I went and talked to quite a lot of people during the last election, particularly those running group and shared apprenticeship schemes and so on, and they were very enthusiastic about this policy and very condemning of the fact that the National Government had run down industry training, with $55 million cut from industry training. This is at a time when unemployment is now up to 170,000. There are 294,000 people actually jobless and 113,000 people looking for more hours. It has declined by 20 percent under National, so it is pleasing to see something in the House at last, after nearly 6 years of a National Government, addressing the issue of apprenticeships.

I also want to draw the attention of members opposite to the purpose of this bill. It is, of course, about providing opportunities for young people and older people to get the appropriate skills and qualifications that are portable, that are relevant, and that are going to enhance their employability. This is not about employers doing favours for people by offering them apprenticeships; this is about making sure that we are building the skills that we need for the future of our country. Without the industry training that we have had over many years, we know that it has caused a huge problem. It has also added to our low wages in New Zealand. Industry training and apprenticeships actually get people with skills so that they can take on the kinds of jobs that we need in this country—we are going to make things that the rest of the world needs—and they will make those people much more employable.

As others have said also, we import skilled workers. I think there is no greater example of that than in Christchurch at the moment. It is disgraceful, really, that 3 years after an earthquake—3 years later, when we knew there was going to have to be a rebuild—we are now importing something like 17,000 or 18,000 workers from overseas, from other countries, to help with the Christchurch rebuild. It has to be done, but when Shane Jones sees the unemployed young Māori in Northland, from where he comes, you cannot blame him for asking why it is that that is happening when we are bringing in skilled workers in Christchurch. It is a failure of this Government to address the need that was clearly coming.

I think it is very important that the Education and Science Committee has a very close look at industry training and apprenticeships, because I think there are some rorts still going on and they are different rorts from the ones that the members opposite decided. It concerns me, for example, that we have people training to be hairdressers in industry training who are paid $10,000 to $20,000 to learn to be hairdressers, yet they are on minimum wage—in fact, they are on training wages, which is about $11 an hour. That is supposed to be tied to credits. In fact, did this Government not reduce the number of credits that you have to have or can have to be paid a minimum wage or training wage? I think there are some quality issues there. I think there are some rorts for young people and that does concern me. I hope that the select committee takes the opportunity to have a look at that.

I think another obvious issue at the moment is other areas of skills. We all talk about building and construction, but it really bemuses me that we are having a debate in this country about truck drivers at the moment. We have an industry that is simply unable to get people to drive trucks, even though we have had industry training in that area for some time. Why is it that people do not want to do that job? My colleague Andrew Little talked about the building and construction industry and how many apprenticeships are actually labour only, which seems to me an incredible rort, actually. That is a terrible rort. They are supposedly apprenticeships, but the apprentices are not even being paid properly. They are supposedly self-employed, with no security of employment, and paying their own ACC.

One thing that happened in the last year was that Mainzeal Property and Construction went bust. But before that it applied to Immigration New Zealand to bring in 100 Chinese workers to work in its business called King Facade. People objected to that at the time, and the unions objected to it on the basis that this was a job where New Zealanders should be being trained—that is, we did not need to be importing Chinese workers to do, basically, what is a job where New Zealanders could be trained and have a profession and have an occupation that would hold them in good stead. The sad thing about what happened to those Chinese workers, of course, is that they all got sent home when Mainzeal Property and Construction went bust. So not only were there opportunities lost for New Zealand workers but also those Chinese workers were not treated particularly well.

Anyway, as I said at the beginning, Labour is committed to supporting this bill and that we have the skilled workforce that we need. We want New Zealanders to have jobs and opportunities, and we want to make sure that we hold the Government to account and make sure that it gets moving on this. It is a serious concern that we have a shortage of skilled tradespeople, and I think it is a disgrace that we have overseen the loss of thousands of apprenticeships under National—thousands of opportunities for industry training. Our young people have suffered. The 20 percent drop in the number of Modern Apprenticeships and a 37 percent drop in the number of industry trainees are shameful. It has fed into the unemployment of our young people. It has created a whole problem for the future. I am glad that the Government has seen sense and has brought this bill to the House, and we look forward to supporting it. Thank you.

JAMI-LEE ROSS (National—Botany): I commend the Industry Training and Apprenticeships Amendment Bill to the House.

Bill read a first time.

Bill referred to the Education and Science Committee.

Hon JUDITH COLLINS (Minister of Justice) on behalf of the Minister for Tertiary Education, Skills and Employment: I move, That the Industry Training and Apprenticeships Amendment Bill be reported back to the House by 10 March 2014.

Motion agreed to.

Bills

Health and Safety (Pike River Implementation) Bill

In Committee

Part 1 WorkSafe New Zealand

ANDREW LITTLE (Labour): It is a pleasure to take a call on this, the Health and Safety (Pike River Implementation) Bill. Part 1 has, effectively, a lot of administrative aspects to it. It sets up the WorkSafe organisation. It enables the efficient, effective, and, hopefully, fair and just transfer of existing staff whose employer is the Ministry of Business, Innovation and Employment to the new legal employer, which will be WorkSafe New Zealand. I know that some of the officials in the ministry who are anticipating the transfer of their employment to WorkSafe are excited by that prospect, are looking forward to it, and are energised by it, and that is what we need.

I commend the Minister of Labour, the Hon Simon Bridges, for a set of provisions, including one, I think, that responded to an earlier Supplementary Order Paper, Supplementary Order Paper 371, by Brendan Horan, which was very concerned about whether or not some service-related entitlements would survive the transfer of employment. I see that that has been achieved, although my own view was that that had been achieved in the original bill, but then Mr Horan has a level of wisdom and sagacity that often eludes most of us. So that is good.

There is an issue, however, that I think, does call for further consideration and comment and, indeed, is the subject of a Supplementary Order Paper in my name, Supplementary Order Paper 387, and that is the governing board of WorkSafe New Zealand. One of the critical things that came out of the Royal Commission on the Pike River Coal Mine Tragedy’s report was the comment about tripartism. The commission drew upon the wealth of knowledge and literature that now prevails about what happens in the United Kingdom. The United Kingdom has very much blazed the trail and led the way when it comes to health and safety governance at an institutional level and at an enterprise level. It did that, of course, a long time ago. It set up its dedicated health and safety body, called the Health and Safety Executive, in 1974 after a succession of workplace catastrophes, including the Aberfan coalmine disaster in Wales in the 1960s. It came up with the model that meant that even at the institutional governance level, at the governing board of the Health and Safety Executive, it should have true tripartism—equal representation of employers, of workers through their unions, and, obviously, of the Government.

The bill as it is currently worded allows a board of at least five but no more than nine, and then sets out a range of criteria for appointees. Only one of them refers to the member’s having experience in or capability in, amongst other things, “perspectives of workers”. “Perspectives of workers”—what does that mean? The only real, genuine, and authentic perspective of a worker comes from a worker’s representative themselves. I think what is important about tripartism, what makes it powerful and enduring, is that the tripartite representatives come from the constituency that they are representing. It is not a ministerial appointment. It comes from the constituency itself.

I have proposed Supplementary Order Paper 387, which does away with the current wording of the bill and replaces subclause 1 in clause 7 with a new subclause to establish a board comprising “3 representatives appointed by the organisation recognised for the time being as the peak body representing workers”—that is, the New Zealand Council of Trade Unions, which, of course, is recognised as the peak body. We have that already because the Government already recognises peak bodies for workers and for employers. For workers currently it is the Council of Trade Unions. For employers currently it is Business New Zealand.

The Government currently recognises those two peak organisations for the purposes of representation at the ILO, the International Labour Organization, an organisation that is itself dedicated to tripartite representation—not an equal balance. It is 50 percent workers and employers, or 25 percent each, and 50 percent for Government. Well, this is a tripartism that sets up equal representation. There are three representatives from the peak organisation for workers, three representatives from the peak organisation for employers, and three representatives of Government. That, I think, is genuinely tripartite. The Government can fashion its representatives. It can allow for some independence, of course, and that is very important.

A consequential amendment to effect that is also to delete a couple of the references in subclause 2 to clause 7 with a genuinely tripartite body. It is not necessary to make the references in paragraph (d) and paragraph (da) to perspectives of workers and perspectives of employers. It will still be necessary, in terms of the Government appointees, to ensure that there is public sector governance, knowledge, and experience; central Government process, knowledge, and experience; health and safety; and all the rest of it.

The purpose of this is very clear. It is to truly reflect what, in my view, the royal commission was getting at, and that is genuine tripartism. That means all those interests coming together, even at that senior level, the policy-making level, and with all the powers that WorkSafe New Zealand will have, will ensure that there is a full balance of perspectives taken and that it is not driven entirely by, nor totally accountable to, just Government. This is a body that must reflect and represent those elements that make up workplaces and industries in New Zealand—that is, workers and employers—with the Government providing that overlying and perhaps that overarching provision there, as well.

I would urge members to vote for that. This is an opportunity for us, as we establish WorkSafe, to establish a state-of-the-art organisation as we move towards state-of-the-art health and safety provision, health and safety regulation, and health and safety regulation enforcement. That, I think, is the genuine ambition of the Government. It was the genuine ambition of the previous Minister of Labour, Kate Wilkinson, it was the genuine ambition of the interim Minister of Labour, Chris Finlayson, and I believe—I am prepared to infer—that it is the genuine ambition of the current Minister of Labour, Simon Bridges. So I would urge the Government and the Minister to look closely and carefully at that amendment and support it.

I want to make one other comment and that is about advisory groups. I made this comment before. It is a good idea to have advisory groups, but the advisory groups provided for in clause 8 of the bill really have no teeth. Really, if they are to be meaningful, in addition to having representatives from the relevant industries and having people who are knowledgable in those industries and who can assist with the preparation of the drafting of good regulations and good codes of practice and with setting good standards, then it is preferable that they have a little more teeth, as well. Beyond just advising the board of WorkSafe, perhaps their power should be a little more meaningful than that.

Nevertheless, it is a good idea, in terms of industry engagement, to get the best possible regulation and the best possible standards, and to be able to delegate that to advisory boards. I would just perhaps ask the Minister how he sees that operating to ensure that those advisory groups and the role that they play is genuinely meaningful and will genuinely engage the industries and interest people to get them on board to do it. I look forward to the Minister’s response and contribution to this part as we debate Part 1.

This is the setting up. It is laying the foundation for the new WorkSafe New Zealand, which will be the flag bearer for health and safety in New Zealand—the dedicated agency that we have been asking for all this time, which both the Royal Commission on the Pike River Coal Mine Tragedy and the recent independent advisory committee endorsed—so it is good if we take this opportunity to get it right. I think there is a willingness within this House tonight to do that, and I hope the Minister will listen very carefully. We will support the change that has been put up for governance. We will answer the query about how the advisory groups will function in practice so that we get the best-quality input from across industry and from the workforces within that industry. On that point, as I say, we look forward to supporting this bill and to seeing New Zealand at last take that great and very important step into the future with the best possible health and safety administration that we can muster.

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): I rise with pleasure to follow on from my colleague Andrew Little and to support the passage of this bill, the Health and Safety (Pike River Implementation) Bill, from the Government. However, I must point, I guess, to some of the questions that need to be answered by the Minister in the chair, the Minister of Labour, and to some of the issues that will arise as an outcome of the legislation. As my colleague Mr Little said, much of this Part 1 refers to the transitional provisions in setting up WorkSafe New Zealand. I have to say that on the weekend I had a discussion at the opening of the new, expanded mines rescue building and base just north of Greymouth, where this was a topic of conversation, and most people welcomed the progress in this area.

There are a couple of things in working through. Right up front in Part 1 here it states that “relevant health and safety legislation” means the Health and Safety in Employment Act 1992, the Machinery Act, and a couple of others like the Electricity Act. Most of those pieces of legislation are quite old. The question I have of the Minister and, I guess, of officials is that what we do not want to be doing in making what is substantive progress in the area of workplace health and safety—setting up WorkSafe New Zealand—is be constrained by reference to legislation that, in the Electricity Act, goes back to 1992. The Gas Act and the Health and Safety in Employment Act, as we know, were passed in 1992.

The Health and Safety in Employment Act was a flawed piece of legislation—absolutely. I am not sure that the Electricity Act or the Gas Act is, but what I want to know is that, in referencing back to those pieces of legislation, technology or wisdom has not surpassed key reference points in the legislation. I want to know that WorkSafe New Zealand, as set up, can actually have some sound drivers, aside from the legislation we are passing here, but also that it is not referencing back to legislation that may be flawed. As I say, I think we have clearly established that the Health and Safety in Employment Act 1992 is seriously flawed when it comes to some areas of workplace safety, although the officials might not agree. We would say that in forestry and we would say that in mining there are big gaps, and we need WorkSafe New Zealand to get on and do a good job.

I support the amendments on Supplementary Order Paper 387 put forward by my colleague Andrew Little. Tripartite approaches towards workplace safety are essential. The sad result of the terrible Pike River tragedy was in part because there was not equal strength from employees when it came to raising issues, raising concerns, in the area of the workplace and how it was operating. We need to know that those people who put their lives on the line have fair representation right at the top level of policy development, of practice, and of, I guess, inspection, ultimately, to ensure that this happens.

I have to say that the Government has made some changes. They have been welcomed throughout the mining industry, and all the functions here stated in clause 10 are well and good, but they mean nothing if the resources are not provided, and the Government has not provided adequate resourcing for the current responsibilities of the new High Hazards Unit and the other areas of workplace health and safety inspections, particularly in mining. Although we may be comforting ourselves in the Committee here tonight that we are passing legislation, moving forward, and setting up WorkSafe New Zealand, I can say categorically that the resources that the Minister and his colleagues have put up so far are inadequate—totally inadequate. I want to hear from the Minister—it is not in the legislation—a commitment to adequate resourcing that means that people are not compromised in their duties.

A sad submission to the Royal Commission on the Pike River Coal Mine Tragedy was from a mines inspector, whom I know personally, whose life has been shattered by this, but who I know felt compromised almost from the time that he took on the job as a mines inspector. I think that we all share some of the responsibility of that inadequate resourcing for him. But it is not good enough for us to pass legislation in Parliament, upgrading standards, upgrading the systems, but not providing the resources. That is a regular comment that I hear from families of the Pike River men who lost their lives—people who are monitoring progress in this area very closely—because they have a real commitment. Their husbands or fathers have paid a huge price to learn the lessons that are delivering us the legislation in the Committee at the moment. I hope the Minister will—and I am sure he will—rise and give us some assurances in this area. It is essential.

I hope that the Government will also see the wisdom of supporting Andrew Little’s Supplementary Order Paper 387, which does, and will, entrench a tripartite approach to health and safety. No employer is on the job the whole time and can know the minute-by-minute risk and the changing risk profile that occur in an underground mine, or in a quarry, or in any underground situation. We have had an explosion in a tunnel in Auckland, so it is not just in underground mines. We have had tragedies, we have had workplace accidents, where they should not have occurred. We are boosting and bolstering the functions of these people, their obligations, but I have not yet seen the resourcing.

This is on behalf of not only the people of the West Coast, the region where much of the mining occurs, but also the people of Huntly—all the people who work in places of higher risk than the offices that we normally sit in on a day-to-day basis and that most of the officials sit in. We can manage our risk. But until people go underground—and, indeed, there are people in the new superministry, the Ministry of Business, Innovation and Employment, an organisation that has a huge range of responsibilities, who have responsibilities for mine safety and have never been underground. I find that strange, if not alarming. I would hope that every single person involved in the development of these regulations and of these practices goes underground for a couple of hours, because until you have been there, you cannot appreciate what these men are working in every minute of their shifts. The lack of appreciation and the casual approach that was taken in 1992—that the employer will know and manage the risk—has been shown to be totally inadequate, to have been, in fact, in hindsight, irresponsible.

We have moved on. I acknowledge the Government and its efforts to improve legislation, to make the changes as recommended—not all the changes. We need Supplementary Order Paper 387 from Mr Little to implement the changes recommended by the royal commission around tripartite representation. If the Government once again steps back from the wisdom of that long and agonising process for the families—but in my view a very sound process that delivered sound recommendations—then it has got to have a pretty good reason. I have not heard one yet when it comes to the Minister’s proposal to appoint all the people to WorkSafe New Zealand. I am sure the Minister will take the opportunity to explain why, but the people who have their lives on the line need to have some input into the health and safety regime under which they work. That is the least that can be expected for them. On that issue, and the one of resourcing—

BRENDAN HORAN (Independent): I would like to take just a brief call on Part 1 of the Health and Safety (Pike River Implementation) Bill. It establishes WorkSafe New Zealand as a stand-alone body—a Crown entity. It takes the important occupational health and safety work that was only recently folded into the superministry, the Ministry of Business, Innovation and Employment, and places that important work into a separate entity, WorkSafe New Zealand. It does that because that work cannot be done well, it cannot be done effectively, and it cannot be done reliably in a superministry.

In clause 9 the bill provides that the main objection of WorkSafe is “to promote and contribute to the prevention of harm to all people at work and in, or in the vicinity of, the workplace, securing the health and safety of workers and workplaces.” That is a pretty big ask, and one the chief executive and the board of WorkSafe will have to work hard to achieve. Their work will be scrutinised. They will be held to account for the safety of every New Zealand family that hopes that their fathers and mothers return home safe and return home alive at the end of each day. I wish them well. I would draw attention to the forestry industry and some of the tragic injuries and fatalities that have occurred there.

In clause 10 we have a baker’s dozen of functions that WorkSafe must discharge in order to fulfil its clause 9 objective. I would like to turn to Subpart 3 because this legislation not only is about the health and safety of all workers and all workplaces but also transfers the employment of around about 300 people. I am speaking about the people who today are working for the health and safety group of the Ministry of Business, Innovation and Employment. When this bill comes into force they will keep doing the same job, but their employer will, at the stroke of a pen, become WorkSafe New Zealand. This is not uncommon as Governments reorganise the public sector from time to time—indeed, some say too often. But reorganisation has been happening since the time of Petronius Arbiter, if I am to believe the apocryphal quotation attributed to that long-dead Roman, but I digress. What is important is that the employment protections of the 300 workers are protected.

A newspaper article caught my eye around about a month ago, and it was the story of a teacher-aide in Whanganui who had lost entitlement to paid parental leave because although she was doing the same job at the same site, her employer had technically changed from one school board of trustees to another. She had therefore fallen between the cracks. When I looked at this Health and Safety (Pike River Implementation) Bill as reported by the Transport and Industrial Relations Committee I saw that in clause 12 it explicitly protected the KiwiSaver rights and the Employment Relations Act coverage of the 300 workers being transferred, but it seems that people amongst the workers with new babies might lose parental leave. So I released Supplementary Order Paper 371 and I wrote to the honourable Minister Simon Bridges at more or less the same time.

To give the Minister credit, he and I spar at times in this Chamber—there is sometimes a little Tauranga tension—but on this occasion he accepted the point. He undertook to obtain urgent advice, and he undertook to address the issue of transferred employees and parental leave in a Government Supplementary Order Paper. I was happy with that, but then the Minister went and did better. With my resources I had been able to release Supplementary Order Paper 371 to protect not only KiwiSaver but Employment Relations Act rights and parental leave, but the Minister, with the entire machinery of government available, identified a better solution. It is new clause 12, which is on Supplementary Order Paper 374. It simply says: “The employment of a transferred employee by WorkSafe New Zealand is be treated as continuous employment for the purposes of any enactment.” That is a great solution. The 300 workers who are working for the Ministry of Business, Innovation and Employment today will, when this Act comes into force, be treated as having continuous employment, and will lose no rights and no entitlements that are available to them under any Act of Parliament. I thank Simon Bridges for that.

I cannot believe I am saying this, but I hope this can become a standard piece of drafting for future legislation on transfers of employment. I note that in the Social Housing Reform (Housing Restructuring and Tenancy Matters Amendment) Bill, which the Government has indicated will progress this week, it is proposed to transfer some Housing New Zealand Corporation staff into the Ministry of Social Development. I would hope that the Minister in charge of that bill, Nick Smith, will be able to follow the lead of his colleague Minister Simon Bridges and incorporate the substance of this clause 12 into that bill.

I will conclude by saying that I hope the establishment of WorkSafe New Zealand is the beginning of safer workplaces in our nation. I hope that they will be, as my colleague said before me, fully and adequately funded and resourced so that their fathers and mothers, their sons, and their daughters will return safe at the end of each day.

Hon SIMON BRIDGES (Minister of Labour): It is a great pleasure and a privilege to take a call on the Health and Safety (Pike River Implementation) Bill as the relevant Minister. I say that being very mindful that, as I apprehend it, there is multipartisan support for this bill. That is a very good thing indeed. I think we are as a Committee doing absolutely the right things here: firstly, in implementing the Royal Commission on the Pike River Coal Mine Tragedy’s recommendations across the board, really, but also doing something, if I can say so, that is wider than that, which is having regard to and implementing the Independent Taskforce on Workplace Health and Safety’s recommendations, particularly in Part 1, to establish WorkSafe New Zealand.

I will just talk very briefly about WorkSafe New Zealand. I think we can say that this really is something exceptionally significant. It is part of, along with this bill and the future work in a health and safety reform bill that I hope to also introduce before the end of the year, the biggest reforms in health and safety in 20 years—perhaps, actually, longer than that. Just to reassure the member Damien O’Connor, I think we can say that WorkSafe New Zealand will be a very well-resourced independent Crown agency. Funding is going from some $50 million - odd to about $80 million per annum. It may not sound like much, but it is a 5c to 8c increase in the health and safety in employment levy on workers, and that will mean, I am confident, that the agency has the funding to do the job of health and safety in this country properly. There will be a review of it, and my memory is that that will be in 2016-17. Again, that is to make sure that we fund this important work properly.

We have heard from the member Brendan Horan that some 300 people are transferring over to this new Crown agency, which will be independently looking after health and safety. Actually, I think that by the time the funding is in place and we have finished, it will be a reasonably significantly greater number than that. So, as I say, this is significant work we are doing. This will be a body that will have, I think, all the tools in the tool kit—education at one end and working with business, through to, yes, some tougher penalties and, I suppose, tools in the tool kit on that end of the spectrum. So that is a good thing. Of course, there are other parts of this bill that we will come to in other speeches in this Committee stage, but I just thought it was important to talk about WorkSafe New Zealand.

Actually, it is quite a big departure from what we have done in the past. It is going against the trend, actually, of not necessarily setting up new Crown agencies, as we have seen over the last few years. I think it is the first one like this in some time, and that is, I think, a good thing because it does need to be independent, it does need to be strong, and it does need to have a sole focus on health and safety. Our record, across Governments and as a society, of 75 people dying per annum, which is about what it is at the moment, is simply not good enough. In fact, if we benchmark it against other countries, it is pretty poor. I, for one, am confident, actually, that although it is ambitious, WorkSafe’s target from me, from the Government, and, I think, from this House to have at least a 25 percent reduction by 2020 can be achieved. Resourcing it, giving it the tools, is very important.

I will just touch briefly on some of the members’ contributions. I think we have had some thoughtful speeches, very constructive speeches. The member Damien O’Connor has talked about the Machinery Act. I will advise the member that that will be repealed through the new health and safety reform bill, so I think that we are making sure we are modernising. Of course, WorkSafe will also have powers to advise me and, I suppose, push me and future Ministers of Labour to change regulations, to look at laws, and to make sure we are continually updating them and keeping them fit for purpose.

I want to also assure the member that the whole policy team has now been underground. I have been underground at Huntly East Underground Mine. It was an eye-opener for me to see that and to see what is happening there. To be literally covered in—I was going to say black, but actually it is white, because I think they cover the coal there in lime or something, do they not? It is quite impressive to see what is happening there, as we further Supplementary Order Paper 374 on the protocols. We have tried to put in place a good protocol for safety underground. That is why I was there. We also say to the member about his other point that, hey, the workers, the people down there, we need to be talking to them, and we certainly have been—

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable Minister. The time has come for me to report progress.

Progress reported.

Report adopted.

The House adjourned at 9.55 p.m.